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Collapsing Microfinance Institutions In Ghana: An Account Of How Four Expanded And Imploded In The Ashanti Region, Festival Godwin Boateng, Stephen Nortey, Jonas Asamanin Barnie, Peter Dwumah, Martin Acheampong, Eunice Ackom-Sampene

International Journal of African Development

The study inquired into the collapse of four microfinance institutions (MFIs) in the Ashanti Region of Ghana. It was found that the collapses primarily were due to unduly risky, unethical and illegal practices, mismanagement and disregard for due diligence, compounded by external factors like macroeconomic instabilities and panic withdrawals, which then pushed the risk levels of the MFIs beyond the point of containment. The paper argues that the 2013 macroeconomic crisis in Ghana only contributed to the pervasiveness of the collapses – the crisis was not a root cause.