Optimal Allocation of Funds, the Loan Portfolio: (a case study of Christian Community Microfinance Limited (Ccml))

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Many Ghanaians both in the informal and the formal sectors take loans for various reasons some for their wards education or being investment in their businesses. Others also take loans to acquire personal properties such as houses and cars. Most people go to the financial institutions for Loans. Due to poor allocation of funds by most financial institutions to prospective loan seekers the institutions are not able to maximize their profits. In view of this monies that can be used for social services in the community in which they operate go into bad debt. The main objective of this study is to develop Linear Programming model to help Christian Community Microfinance Limited (CCML), Eastern Zone, to allocate their funds to prospective loan seekers in order for them to maximize their profits. The problem was modeled as a linear programming problem. Simplex algorithm was used to solve the problem. It was observed that, if CCML Eastern zone, disbursed a total of GH¢120,000.00 a profit of GH¢32,068.48 will be realized.
A Thesis Submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology (KNUST) in partial fulfillment of the requirements for the award of a Master of Science degree in Industrial Mathematics .2013