Managing institutional characteristics and client information for sustainability of microfinance institutions in Ghana

Abstract

The purpose of this study is to find out the impact of institutional characteristics and client information on sustainability of microfinance institutions (MFI) in Ghana. These factors are ownership, propensity to lend, motivation for setting up, clientele type, source of funding and quality of information on clients. The methodological approach adopted for the study was a mix of interviews and questionnaire involving 14 CEOs and 116 MFIs. The findings indicate that even though all the institutional factors studied tend to impact on sustainability much emphasis is placed on motivation for setting up, clientele type and good quality information on clients. Urban traders, the study discovered were the preferred clientele just as quality information on their clientele ensured that the MFI minimizes the risks involved in lending. A planned, focused and sustained effort to grow is a sine qua non if an MFI is to survive. Recommendations on how the MFIs can exploit their institutional characteristics and client information to enhance their sustainability have been made.