Banking the Unbankables: Microfinance in the Northern Region of Ghana

Abstract

In essence microfinance is a very simple concept: supply the poor with financial services such as a loan and saving possibilities. But a simple concept that appears logical and easy may turn out completely different in reality. Microfinance in the Northern region of Ghana cannot be typified as Lev Tolstoj´s ´happy family´. Many aspects in the local environment have a negative effect on the level of success that can be achieved. Microfinance is in essence a ‘beautiful’ concept that can lift the poor out of their economic misery. But the dynamics of this world are harsh and many micro, meso and macro factors intervene in the growth of microfinance. Four main factors - social & cultural-, economic-, and political elements, and the microfinance institutions themselves - influence the development as well as the performance of microfinance in the Northern region of Ghana. Each factor contributes to the dynamics and the development of microfinance in its own way.