Microfinancing has been good for Ghanaians and Ghana’s GDP as the top microfinance companies in Ghana continue to grow their user base and expand operations across Ghana and neighbouring countries. As SMEs remain the lifeblood of many economies, the need for microfinance companies will remain.
Statista reported that a total of 18.8% of Ghana’s metropolitan areas had access to microfinance services as of 2021. Only 1.2% of rural communities have access to these services. Ghana’s financial and insurance sectors significantly boosted the GDP of the nation in the second quarter of 2021.
This is evidence that there is a lot to be done, most especially by the top microfinance companies in Ghana in order to ensure that many more Ghanaians in their various communities have access to microfinance services, which is bound to further boost Ghana’s GDP.
This article examines microfinancing, its place in Ghanaian society, its benefits, the history of microfinancing in Ghana, what separates top microfinance companies in Ghana from the rest and a list of top microfinance companies in Ghana. Stay with us.
Table of Contents
What is microfinancing?
Microfinancing is the name given to financial services provided to those from lower socioeconomic statuses or to those who don’t have access to more conventional financial services. Savings accounts, checking accounts, financial transfers, micro insurance, and microcredit are just a few of the services that make up microfinance.
Microcredit, the practice of giving out very small loans to people without a continuous source of income, assets to pledge as security or credit history, was where microfinance first emerged. Additionally, it attempts to assist and encourage business owners who lack the funding necessary to launch a venture or realize a concept.
Similar to microcredit, microfinance has the same goal: to assist and inspire entrepreneurs in underdeveloped countries to act on their ideas and acquire the financial resources necessary to do so and eventually become self-sustaining. Its broad objectives also include fostering economic growth, reducing unemployment, and supporting small enterprises.
In order to better prepare its customers for launching a small business or for acting effectively as an entrepreneur, several microfinance institutions also offer financial and business education.
What are the benefits of microfinancing in Ghana?
Microfinancing in Ghana has always been driven by the principle of financial inclusion. That has been the clarion call of the top microfinance companies in Ghana as they ramp up customers.
The so-called “unbanked” is a socially, geographically, and economically disenfranchised population, and microfinance has been and is being used to encourage and enhance their financial activity and assist them in escaping poverty.
Microfinance may assist low-income households in ways and places that the broader public cannot even fathom. For instance, it would seem absurd to imply that folks in need may get loans for something as easy as replacing their roof.
However, top microfinance companies in Ghana provide low-income people money to pay for expenditures that we typically take for granted, such as buying a sewing kit or welding equipment to start your own business or spending money for personal situations like weddings or funerals.
Aside from this, MFIs also offer funding for more “serious” expenses like health insurance and loans for both individuals and businesses. This is where microfinance companies start to stand out.
What is the difference between banks and microfinance companies in Ghana?
Regular banks provide a variety of consumers with loans, deposit services, and other financial services; usually, they lend against collateral put up by borrowers. The majority of top microfinance companies in Ghana focus on poorer clients, and many use group guarantees as a form of collateral.
Some microfinance companies, but not all of them, are permitted to accept deposits. Due to the necessity that borrowers begin repaying their loans as soon as possible after receiving them, traditional microcredit has a constraint that severely restricts the kinds of activities that borrowers can fund; petty trade is typical for these borrowers.
Studies raise the question of whether microloans from the top microfinance companies in Ghana genuinely assist borrowers; in general, interest rates are relatively high, reflecting the lack of economies of scale that such tiny loans imply.
The growth of MFIs and the top microfinance companies in Ghana
The formation of non-bank financial institutions in Ghana was permitted by PNDC Law 328 in 1991, which marked the beginning of the emergence of several businesses claiming to provide microcredit. There are many of these micro-finance businesses in Ghana as a result of the banking sector’s liberalization.
A variety of regulatory infractions, depreciations, and vulnerabilities were brought on by the explosion in the number of MFIs without a stringent regulating agency like the ARB Apex Bank. As a result, the majority of these institutions saw a decline in their financial situations and ultimately went bankrupt.
The risk of losing their assets and money was therefore present for depositors at these institutions. As recently as 2019, the Bank of Ghana was forced to intervene and shut down roughly 347 micro-finance companies that were dispersed throughout Ghana in order to purportedly protect depositors’ investments with them.
What separates the top microfinance companies in Ghana from the rest?
What separates the top microfinance companies in Ghana from the rest is the simplicity with which they offered their services, which means easy accessibility and that is where the answers lay. People may create accounts and establish banking ties with these Microfinance companies quite easily with just a name and phone number.
While banks must go through a comprehensive KYC procedure, top microfinance companies in Ghana are not obligated to do so since there is no strict monitoring authority that checks their compliance, but they do their best.
Again, due to their lenient loan approval procedures, microfinance companies release loans more quickly and easily than traditional banks do. Another factor is the exorbitant profits on investment goods that are sometimes outrageously promised to the unwary public.
Top microfinance companies in Ghana (Approved)
Previously at 484 microfinance banks in Ghana. Due to insolvency and unethical behaviour, the licences of 347 MFIs were revoked to protect customers and investor funds. The 137 on this list are the top microfinance companies in Ghana and you are free to do business with all of them wherever you are in Ghana, while exercising reasonable caution.
|3AS Microfinance Limited
|Adipa Microfinance Limited
|Adom Boafo Microfinance Limited
|Afro-Arab Microfinance Limited
|Albrim Microfinance Limited
|Alphamaga Microfinance Limited
|APA Microfinance Limited
|Asankraman Microfinance Limited
|BAF Microfinance Limited
|Baobab Microfinance Company Limited
|Beneficial Microfinance Company Limited
|Besworth Microfinance Limited
|BI Microfinance Limited
|Bidvest Microfinance Limited
|BJ Capital Microfinance Limited
|Boston Premier Microfinance Limited
|CAGL Microfinance Services Limited
|Capitalnet Microfinance Limited
|Cashback Capital Microfinance Limited
|Cashpoint Microfinance Limited
|Cedi Capital Microfinance Limited
|Central Microfinance Limited
|Cidan Capital Microfinance Limited
|Classic Microfinance Limited
|Coastal Commerce Microfinance Limited
|Cran Microfinance Limited
|Credit Nest Microfinance Limited
|DCI Microfinance Limited
|Delta Microfinance Limited
|Dunia Microfinance Limited
|Eazy Capital Microfinance Limited
|Eddievyn Microfinance Limited
|Eman Capital Microfinance Limited
|Equity Focus Microfinance Limited
|EV Microfinance Limited
|Expert Link Microfinance Limited
|Family Trust Capital Microfinance Limited
|Fast Link Microfinance Limited
|Fast Track Microfinance Limited
|Fed Microfinance Limited
|First Rate Microfinance Limited
|Forbes Microfinance Company Limited
|FWF Microfinance Limited
|Gaewornu Microfinance Services Limited
|GAP Microfinance Limited
|GEEM Microfinance Company Limited
|GEM Capital Microfinance Limited
|GIFS Microfinance Limited
|Globafin Microfinance Limited
|Golden Foundation Microfinance Limited
|Growth Pioneers Microfinance Limited
|High Ages Microfinance Limited
|HM Plus Microfinance Limited
|HOB Capital Microfinance Company Limited
|Hopeline Microfinance Limited
|Impact Capital Microfinance Limited
|Impact Microfinance Company Limited
|Independent Microfinance Limited
|Innovative Microfinance Limited
|Integrity Infinity Microfinance Limited
|Interzen Microfinance Limited
|Jadel Plus Microfinance Company Limited
|Jally Microfinance Company Limited
|Jimet Microfinance Company Limited
|Jireh Microfinance Limited
|JITA Credit Partners Microfinance Limited
|Jl Brisk Microfinance Limited
|K5 Microfinance Company Limited
|Kasdaf Microfinance Company Limited
|Kenstep Microfinance Limited
|Kesinor Microfinance Limited
|Kingsban Capital Microfinance Limited
|Leverage Microfinance Company Limited
|Little Rock Microfinance Company Limited
|Loan Line Microfinance Limited
|Love Microfinance Company Limited
|Mabia Microfinance Services Limited
|Maroon Capital Microfinance Limited
|Medi Ghana Microfinance Limited
|Metro Gold Microfinance Limited
|MGI Microfinance Limited
|Mid-County Microfinance Limited
|MoniCapital Microfinance Limited
|Mwintuur Microfinance Limited
|Naatoa Microfinance Services Limited
|Needs Microfinance Limited
|Neighbourhood Microfinance Limited
|Noble Trust Microfinance Services Limited
|Ocean Capital Microfinance Limited
|Olive Branch Capital Microfinance Limited
|Ontime Microfinance Limited
|Options Microfinance Company Limited
|Osacs Microfinance Limited
|PAK Microfinance Company Limited
|Payflex Microfinance Company Limited
|Positive Microfinance Company Limited
|Prime Invest Microfinance Limited
|Principal Capital Microfinance Limited
|Pure Eden Microfinance Company Limited
|Q Capital Microfinance Limited
|Quality Microfinance Limited
|Quick Capital Microfinance Limited
|Quicken Microfinance Limited
|Rapid Link Microfinance Limited
|Rogai Microfinance Limited
|Royale Mikri Microfinance Limited
|Safe Microfinance Company Limited
|Secure Capital Microfinance Limited
|Sheedy Microfinance Limited
|Shield Microfinance Company Limited
|Skilimit Microfinance Limited
|Solidario Microfinance Limited
|Speed Microfinance Company Ghana Limited
|Springboard Microfinance Limited
|Stegenor Microfinance Limited
|Success for People Microfinance Limited
|Summit Vision Microfinance Services Limited
|Tailored Solutions Microfinance Limited
|Talent Microfinance Services Limited
|The Mint Microfinance Limited
|Tiger Force Microfinance Limited
|Trustwell Capital Microfinance Limited
|Ubuntu Capital Microfinance Limited
|UDF Microfinance Limited
|UNI Capital Microfinance Limited
|Unimas Microfinance Limited
|Universal Microfinance Limited
|Uptima Credit & Microfinance House Limited
|Usave Microfinance Limited
|Vivantti Microfinance Company Limited
|Wallstreet Microfinance Limited
|Wema Microfinance Limited
|West One Microfinance Limited
|Westlake Capital Microfinance Limited
|Yaalex Microfinance Limited
|Yilo Star Microfinance Limited
|YU Microfinance Limited
The principle of financial inclusion remains one of the reasons a large number of unbanked rural areas need the services of MFIs, majorly due to their ability to fund inclusion expeditions. This is sure to better the lot of the microfinance banks and their growing number of customers.
Our Writers most times refer to other reputable publishers source to bring in more facts especially when it has to do with stats