An investigation into the operations of microfinance institutions within the Kumasi Metropolis
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Date
August, 2016
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Abstract
Microfinance services in the financial sector have spread all over the nation to serve the needs of the poor and the community as a whole. The industry also emerged as an innovation in lending to the rural poor in Africa. But lack of due diligence and effective management practices has led to the collapse of most microfinance institutions within the Kumasi metropolis. Hence, the aim of the study was to explore operations of microfinance institutions within the Kumasi metropolis. The specific objectives were to identify the challenges effecting the effective operational management of microfinance institutions within the Kumasi metropolis, to evaluate factors which attributed to the collapse of some microfinance institutions within the Kumasi metropolis and to identify the strategic approaches for effective operational management of microfinance institutions within Kumasi metropolis. Through a thorough literature review questionnaire was developed and administered to ten (10) microfinance institutions involving five (5) operational staffs within each setup. Data generated from the survey were further analysed using descriptive statistics involving percentage, frequency, mean and standard deviation. The following were revealed as the challenges to effective operational management of microfinance institutions, namely: dishonest employees, lack of understanding in the definition and concept of microfinance by the clients, lack of standardize reporting and performance monitoring system for microfinance institutions were the major Moreover, most causes in the collapse of microfinance institutions was as a result of mismanagement, illegal operation with unethical practices and disregard of due diligence. Based on the above finding the following recommendations were deem necessary. Circumspection in recruitment and selection of the right and qualify human personnel, Due diligence by management in the legal operation with ethical practices and control of public rumor in avoiding panic withdrawal. Periodic customer’s seminar by management on various services and policy guidance to prospective customer on their business guidance and operations with respective financial institutions.
Description
A thesis submitted to the Department of Marketing and Corporate Strategy of Kwame Nkrumah University of Science and Technology in a partial fulfillment of the award of the degree of Masters of Business Administration (Strategic Management and Consulting).