The Institutional and Regulatory Framework of Co-operative Societies in Ghana: Implications for Credit Unions

Abstract

Over the past few decades the activities of cooperative societies in developing countries have gained considerable interest from development theorists and practitioners. The interest in cooperative societies stems from their role as providers of financial support to middle and low income earners. Whilst some have doubted whether as a mi-crofinance unit, cooperative societies can help the poor and still remain sustainable, others argue that such financial institutions are more likely to weather financial storms and effectively serve the poor in unstable economic countries so long as they are properly regulated. This paper therefore examined the regulatory and institutional framework of credit unions and its implication for growth. We adopted a cross-sectional survey design approach by using an interview guide to solicit responses. The results of the study showed that unlike other microfinance institutions , credit unions are regulated by various regulatory agencies, including the Registrar of Cooperative Societies and the Ghana Cooperatives Credit Unions Association (CUA). Though credit unions were found to meet the needs of the poor and low-to-middle income earners, the system will crumble if institutional and regulatory frameworks are not reviewed to ensure efficiency and financial sustainability