Revisiting MSMEs Financing Through Banking Reform Processes: Assessing the Ghanaian Legal Experiences

This chapter discusses the institutional and regulatory framework underpinning Ghana’s banking reforms and its impacts on access to credit by Micro, Small and Medium Enterprises (MSMEs). It also examines the various banking reforms introduced by the Central Bank of Ghana since 1953. It argues that the recent banking reforms have generally been occasioned due to the lack of efficient regulatory and institutional framework to govern the sector. The chapter used a qualitative desktop study approach to analyse how Ghana’s banking reforms have been managed, with a comparative analysis of Nigeria and South Africa’s successful reforms of their banking industries. It was found among others that, unlike Nigeria and South Africa, the banking reforms in Ghana over the years and their impacts on credit flow to the productive sectors of the economy have not been significant. The surge in competition in terms of the size of deposits and shares of these banks on the market has lent little to the financing of MSMEs. The ineffective legal framework was identified as constituting a major avenue for banking sector mismanagement. Considering the changing nature of the economy, a constant revision and harmonisation of regulations and legislation are recommended as policy measures to address emerging variations.