Reconciling Commercial (Universal) Banking with Microfinance Institutions in Ghana, Case Study: Greater Accra Region

Augustine Adu Frimpong, Peter Agyekum Boateng, Emmanuel Bismark Amponsah


The study focused on reconciling commercial banking with microfinance institutions in the Greater Accra region. The study identifies that microfinance institutions were not able to eradicate the poverty level among Ghanaians which calls for the indulgence of commercial banks to rescue the nation from poverty through the provisions of some of the microfinance services. The study uses a sample size of 500 respondents and adopted both descriptive and quantitative analysis. The descriptive analysis takes into accounts both pie charts, bar-graphs and tables whereas the quantitative analysis used both probit and Ordered probit regression model to analyze whether or not commercial banks are providing microfinance services and their level of performance in executing the role of the MFIs respectively. The main objective of the study was to identify the role of commercial banks in comparison to that of Microfinance institutions and to further examine the extent to which commercial banks meet the criteria of MFIs as well as some challenges the commercial banks faced. The study also revealed that door-to-do banking services are offered by both commercial banks and Microfinance institution. The study finds out that the structures (administrative staff, logistics, collateral requirements, etc) that are required for the operating of microfinance services on the market are completely different from that needed to offer pure commercial banking services. The study further finds out that high default rate among customers seems to be part of the major challenges the bank faces in discharging microfinance services. In the nut-shell the study revealed that commercial banks go out of their various banking halls to the individual on the market often times to promote/ market their product available in the banks  and not necessarily offer microfinance services to petty traders and other small business units.

Keywords: Microfinance, commercial banks, financial institutions, loans, savings

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