Bad Debts analysis of non-banking financial Institutions: the case of Unique Trust Financial Services Ltd.

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The importance of the development of the financial sector of the economy of Ghana cannot be over —emphasized. Since greater attention is being given to this sector as the engine of growth more groups are found engaged in this sector. These groups due to the minimum capital requirement set out by the Bank of Ghana the statutory regulator are formed by group of individuals, organizations or joint venture of firms and individuals. The commercial banks form the majority in the financial sector. Unfortunately most of their clientele are in the formal sector of the economy. Due to this the informal sector is not adequately catered for. It is in the light of this that the non banking financial institutions that offer loans and advances have a key role to play in complementing the work of the banks that normally shy away from the risky informal sector. One of the pioneers of these non banking financial institutions is the Unique Trust Financial Services Ltd. This company was adjudged the best financial institution in Ghana in 2005. It was also adjudged the second best company in Ghana in 2005 and had been the best non-bank financial institution since 2003. These were the out come of a research conducted by Ghana Investment Promotion Council. With these accomplishments this study is conducted to analyze the bad debts of this company and to find out how its operations are conducted. Closed- ended questionnaire was prepared as a major instrument to sample information and views on a sampled population of 35 staff and 200 clients. Primary data was collected through interviews guided questionnaires on management. Secondary data was also taken from management to analyze the bad debts of the company from 2004 to 2007. Descriptive method was used to analyze the findings. Summary of the study, recommendations and conclusions were made to guide management in improving their operations and assist future researchers in this area of study.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirements for the award of the Degree of Master of Business Administration, 2008