Evaluation of Factors Influencing the Sustainability and Outreach of Microfinance Institutions in Northern Ghana

Abstract

Purpose: The study examined the factors that influenced the sustainability and outreach of microfinance institutions in northern Ghana from the view point of managers and operation staff of microfinance institutions.

Methodology: Questionnaires were administered to a sample of 181 managers and operation staff of 18 microfinance institutions in northern Ghana. Purposive and convenience sampling techniques were used. Data was analysed using Spearman multiple correlations.

Findings: The study found: a positive  statistically significant relationship between capital structure and financial sustainability in northern Ghana,  failed to uncover any  statistically significant relationship between capital structure and outreach, failed to find statistically significant relationship between financial sustainability and outreach levels in northern Ghana, find a positive statistically significant relationship between capital structure, financial sustainability and outreach in northern Ghana.

Originality: The study adds to the literature on microfinance sustainability and outreach and in particular the Ghanaian context.

Limitation: The study is limited to only microfinance institutions operating in northern Ghana and the perceptions of finance professionals. The study suggests consideration of the entire regions of Ghana and the usage of actual loan data of microfinance institutions.

Keywords: Microfinance institutions, Ghana, poverty reduction, capital structure, sustainability, outreach.

DOI: 10.7176/RJFA

DOI: 10.7176/RJFA/10-16-16

Publication date: August 31^st 2019