Performance assessment of microfinance institutions in the Ashaiman Municipality

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The object of this study is to identify the microfinance institutions operating in the Ashaiman municipality, measure their performance through the use of indicators such as Portfolio Quality, Financial Performance based on their audited accounts to determine return on Equity, Investment, Debt/Equity Ratio, and Return on Assets.For efficient collection of the relevant information, a sample size was selected from the entire population. Asimple questionnaire was developed and administered among the sample. Inaddition to the administering of the questionnaire, there were interviews with key managers of the Rural Banks, Savings and Loans and Credit Unions. Through the study, it was observed that customers that obtained loans from the Savings and loans company were more than the Rural Bank and the Credit Union, even though their cost of borrowing (from the Savings and Loans) is higher. It was also found that Credit Union have very low recovery rate.It is recommended that since most customers prefer accessing loans from the Savings and Loans, the management of the Savings and Loans reduce their interest rates in order not to ‘kill’ the smaller businesses since their profit is not so high.
A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Executive Masters of Business Administration