A local news report indicates that Ghana’s microfinance sector is “on the verge of collapse” due to defaults and poorly monitored spending at the Microfinance and Small Loans Centre (MASLOC), a microfinance scheme created as part of the governmental Ghana Poverty Reduction Strategy. MASLOC loans to both individuals and MFIs and reportedly has a budget to disburse USD 24 million in Ghana during 2011 (please refer to the November 16, 2010 story from MicroCapital on this topic).
According to Ghanaian news source ghanadot.com, Ms Bertha Ansah-Djan, the Chief Executive Officer of MASLOC, has revealed that the centre currently has no money to lend since its borrowers have failed to repay approximately GHS 80 million (USD 52 million) over the past two years. Ghanadot.com cited Mr Abdul Salam Rahaman, a senior economist with no identified affiliation, as commenting that “unregulated granting of poverty related funds at the centre, improper appraisal of projects before granting of facilities, granting of huge sums of loans to the managers of the fund and low recovering rate for facilities” have resulted in the fund going broke.
Depending on the size of the loan, MASLOC issued loans with terms of six months to seven years. In addition to MFIs, beneficiaries included taxi drivers, farmers, market traders, animal husbandries and vegetable farmers.
By Carol Kim, Research Associate
About Microfinance and Small Loans Centre (MASLOC): MASLOC was introduced in Ghana in 2004 under former President Kufuor’s administration. MASLOC was created as part of the Ghana Poverty Reduction Strategy, a policy agenda for poverty reduction and economic growth laid out by the Ghanaian government and the World Bank. The scheme was launched to administer, coordinate and monitor microcredit schemes in the country with the goal of making sustainable financial services available to all individuals, co-operatives and microfinance institutions (MFIs) in the country. In 2011, MASLOC sought to lend GHC 230 billion (approximately USD 16 million) for microcredit on-lending and GHC 11.5 billion (approximately USD 8 million) for small loans.
Sources and Additional Resources:
Ghanadot.com: “Bad debt kills microfinance sector in Ghana”, http://www.ghanadot.com/news.ghanadot.kunate.microfinance.062611.html
MicroCapital.org: “MICROCAPITAL BRIEF: Government of Ghana Budgets $10m to Support Ghana Interbank Payment and Settlement System (GHIPSS) to Reach Rural Customers Through “E-Zwich” Biometric Identification System”, June 21, 2011, https://www.microcapital.org/microcapital-brief-government-of-ghana-budgets-10m-to-support-ghana-interbank-payment-and-settlement-system-ghipss-to-reach-rural-customers-through-%E2%80%9Ce-zwich%E2%80%9D-biometric-identificati/
MicroCapital.org: “MICROCAPITAL BRIEF: Microfinance and Small Loans Centre (MASLOC) to Disburse $24m to Cover All Regions of Ghana During 2011”, November 16, 2010, https://www.microcapital.org/microcapital-brief-microfinance-and-small-loans-centre-masloc-to-disburse-24m-to-cover-all-regions-of-ghana-during-2011/
MicroCapital’s Universe Profile: Microfinance and Small Loans Centre (MASLOC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+and+Small+Loans+Centre+%28MASLOC%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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