An examination of the products/services of Microfinance Institutions (MFIS) in Ghana-the case of GIFS

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The important role played by microfinance in reducing poverty in developing economies cannot be underestimated. However, the extent to which microfinance interventions can help to alleviate poverty depends on the products and services offered. Against this backdrop, the study sought to examine the products and services offered by microfinance institutions and their impact on the livelihood of beneficiaries. The study used a detailed, single case study of a microfinance firm in the Ashanti Region of Ghana. A convenience sampling technique was employed to sample 163 customers of the microfinance institution. In addition, the operations manager of the institution was interviewed. The study established that both financial and non-financial services are offered to customers. The financial services offered can be categorized into savings, loan and money transfer product. The study further revealed that the product of microfinance institutions, especially GIFS, encourages the poor in society to cultivate the habit of savings. However, the major problem confronting individual and SMEs has to do with the delays in loan processing. Also challenges such as high interest rates on loans, demand for collateral security and short repayment periods are were identified by customers. From the perspective of GIFS microfinance, the main challenge affecting the smooth operations of the institution is the high illiteracy rate among their customers. The study recommends, among other things, that Microfinance institutions should constantly review and introduce financial and non-financial services that will help improve the livelihood of customers and the general society as a whole.
A Thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Master of Business Administration (Finance Option)