Difference in the Sustainability between Microfinancial Institutions Which Offer Combined Services and Those Which Offer Solely Micro-Credit

Christine Avortri, Prof. T. B. Wereko


The sustainability of MFIs in Ghana has been of great concern to all stakeholders due to the rampant collapsing of Microfinancial institutions in recent times. The study assesses the difference in the sustainability of Microfinancial institutions which offer both micro credit and micro savings and those which offer solely micro-credit. The study was conducted in Ghana using data from sample of 20 out of 32 Microfinancial Institutions in the country which had reported to the Microfinance Information Exchange Market from 2006 to 2013. The study adopted quantitative approach and used Mann- Whitney U test in analysing the data. The study found that MFIs which offer combined service are less sustainable than those which offer solely micro credit. The study also found statistically significant difference in sustainability in terms of portfolio at risk greater than 30 but not in terms of operational self sufficiency between MFIs which offer combined service and those which offer solely micro credit. The study recommended that Deposit-taking Institutions should improve upon liquidity and credit risk management practices by adopting effective treasury management practices.

The regulator should ensure that only MFIs which are having the right calibre of personnel who will ensure effective treasury management practices be allowed to operate and accept deposit. Finally deposit taking institutions should explore how to integrate technology in their operations so as to reduce cost associated with mobilising micro savings.


micro-credit; micro-savings; Operational self-sufficiency; Portfolio at risk; Sustainability.

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