The impact of non-banking financial institutions on the economy of Ghana: A case study of Sinapi Aba Trust, Kumasi

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The emergence and growth of the non-banking financial institutions and informal institutions over time affected domestic savings mobilization and credit delivery support in the formal sector as savers moved to the informal and non-banking financial institutions. There is therefore the need to assess their contributions to the economy, thereby acknowledging their importance and how best to harness their benefits to the country’s economic development. The goal of the study was to examine the operations of non-banking institutions in financial intermediation and their impact on the economy. The study was to assist non-banking institutions identify their unique roles and perform them better. Extensive literature was reviewed into researches that have been carried out on the non-banking financing and its impact on the economy. A case study organization, Sinapi Aba Trust was selected as a Non-Banking institution in the Kumasi metropolis and the entire organizational members constituted my population. Quantitative and qualitative methods of analyzing statistical data were employed in the analysis of the data. The study revealed that, these non-banking institutions contribute immensely in the areas of poverty alleviation and employment generation to the rural poor. It was then evident that Small Scale Enterprises (SME) financing sector is a backbone of the Ghanaian economy, accounting for a high percentage of the exports, employing over 70 percent of the available workforce and generating 56.2 percent of its private sector turnover, which appears significantly than what happens in most other countries.
A dissertation submitted to the Department of Accounting and Finance, School of Business, Kwame Nkrumah University of Science and Technology in partial fulfillment for the degree of Master of Business Administration, 2008