Effects of Regulations on the Performance of Microfinance Institutions in Ghana: An In-Depth Case Study of Initiative Development Ghana (ID Ghana)
Ghana has been at the forefront in the fight against poverty and under development in the Sub-Saharan Africa. Many industry players see the rapid growth of microfinance as a panacea for the elimination of poverty and a sure way of financial equality and inclusion in most developing countries. The proliferation of microfinance institutions in Ghana and most sub-Saharan countries seems to be a signal for governments to come out with regulatory policies in this important industry. A mixed research method was adopted for the study with a questionnaire administered in addition to interviews with key staff and managers of Initiative Development Ghana. The findings of the study concluded that regulation of microfinance institutions by the central bank have a positive impact on their financial performance. It is recommended that the central bank upgrade the skills of its staff, employ more competent and qualified personnel to enable it execute its mandate as regulatory authority. A major limitation was the small sample size used in the study. Future studies should include bigger sample size.