Micro Finance in Ghana. Due Diligence on Micro Financial System Management Towards Reduction in Poverty and Unemployment

The objective of the paper is to investigate the complexities that are prevailing in the micro financial system which has recently witnessed foray of digitalization and conceivably suggesting an integrated financial product system biased to demand side as a way forward for policy consideration towards mitigating poverty and unemployment in Ghana. For the said purposes, the study is based on secondary data and published official documents. Further, the filed observations of the principle author who has worked as a branch manager in Ghana have been taken cognizance of the empirical facts while doing in both descriptive analysis and drawing conclusion as well. The major bottlenecks that hinder smooth function of microfinance, include insufficient donor funds to MFIs, lack of proper adherence of rules and regulations improper monitoring system, loan delinquency in the supply side, and continued dependence on traditional money lender regardless of rate of interest poor clients protection and capability differential among the poor clients of MFI in the demand side. For challenging these hurdles, a slew of suggestions which are made for policy considerations include arranging adequate investable fund through institutional linkages, candid identification of target group based on their capabilities as poor, poorer, poorest, designing integrated pro poor financial products and services (credit plus)capability building of the poor through financial and digital literacy and skill up graduation, client protection to the poor till graduation above poverty line, moral suasion to the actors for eschewing higher interest of rate microfinance. The study confirms the presence of challenges and bottlenecks in the MFI management and the need for due diligence for achieving their mission in terms of reduction of poverty and unemployment.