Relationship Between Financial Regulation and Microfinance Institutions Sustainability and Outreach in Northern Ghana

Abstract

Purpose: This study examined the relationship between financial regulation of microfinance institutions and their sustainability and outreach from the view point of managers and operation staff in northern Ghana.

Methodology: The study used primary data. Purposive and convenient sampling techniques were used in selecting 189 managers and operating staffs across 18 microfinance institutions operating in northern Ghana. In addition, the researchers purposively sampled 5 experienced senior staff from the Bank of Ghana. Data was collected using structured questionnaires, which was personally administered by the researchers and two research assistants. Research assistants were trained by the researchers on the ethics of this study before and during the data collection process. Data collected was analysed using Spearman’s correlation and descriptive statistics.

Findings: The study found positive statistically significant relationship between financial regulation and financial sustainability and outreach among managers and operation staff of MFIs surveyed in northern Ghana. The study further found that financial regulations of MFIs in northern Ghana affected sustainability and outreach.

Originality: This study adds to the literature on financial regulation and microfinance sustainability and outreach in the context northern Ghana.

Limitations: This study is limited to only northern Ghana and not Ghana in its entirety. The study was delayed due to publication processes and other factors and changes might have taken place in the microfinance industry in northern Ghana. However, this notwithstanding, the results of the study are still relevant for publication.

Keywords: Financial regulation, Sustainability, Outreach, Ghana, Microfinance institutions.

DOI: 10.7176/EJBM/11-25-10

Publication date:September 30^th 2019