Government Statistician, Prof. Samuel Kobina Annim, is making a strong case for more attention to be paid to the microfinance sector as statistics show that it is the best avenue to bridge financial exclusion.
Data from the Ghana Statistical Service show that 2 out of 5 people living in the country are financially excluded. This means that they have no access or lack the ability to use a range of financial services available in the country.
According to the associate professor of economics with specific concentration on micro development economics and applied micro econometrics, the worrying aspect of the statistics is that, majority of the people who are financially excluded are in the northern part of the country, a development aggravating the north-south economic disparity.
Delivering the keynote address at the Ghana Association of Microfinance Companies (GAMC) 9th Annual General Meeting (AGM), Prof. Kobina Annim said: “Within the country, we still have a gap. Financial exclusion currently stands at 37.22 percent which means that close to 2 out of every 5 persons in Ghana are excluded from the financial sector.
If you look at this more carefully in terms of their distribution across the 16 administrative regions, we have the five regions in the northern part of the country, precisely Upper West, Upper East, Northern, North East and Savannah having more than 50 percent of people residence in this region that are financially excluded.”
For him, the development needs some special attention from the government but was quick to add that Microfinance companies after the financial sector clean-up are in a well placed to reposition themselves; not only to gain public trust but attract international funding.
Speaking on the theme: Positioning Microfinance Companies to Sustain Financial Intermediation through Disruptive Periods’ Prof. Kobina Annim said, now more than ever microfinance companies need to do the right things to be able to attract international funding as the outbreak of COVID-19 has place some distress on liquidity.
“It is very well known in the sector that we need to commercialize and upscale microfinance activities. We all need to come together and find a solution to the issues of trust and confidence in the sector. One of the means through which I believe this can be dealt with is simply making yourself available and making your information available.
While I try to think about how I am going to deliver this speech, I took the pain to go to the website of a number of apex institutions and I must say that the information there would continue to inhibit your ability to attract funds,” Prof. Kobina Annim added.
He noted that, at the early days of microfinance companies, an information exchange platform was established by the central bank to support the operation of the sector.
“The reason why that platform was established is to use it as a conduit to attract international funding to microfinance institutions and 10 -15 years on there are stories of companies that have been able to attract international agencies investing in microfinance institution.
So, if we continue to put our operations under cover, where our virtual presence is not there, both at the apex level and the institution level, then I am not too sure whether we can fully address the liquidity problem and give confidence to the public.”