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FUNDAMENTAL IS
SUES OF REGULATION AND SUPERVISION OF
MICROFINANCING IN GHANA
Christine Avortri
1
, T. B. Wereko
2
The success or failure of micro
-
financial institutions in the country goes a long way to affect
the financial system as a whole. Recently there has been sever
al public outcries over what they
considered as failure on the part of the regulator to regulate the sector; contributing to the
collapse of more than thirty institutions in 2013 alone. This study identifies the various
regulatory frameworks and directives
since 2008, the extent to which they are enforced and the
challenges of supervising the micro
-
finance sector in Ghana.
The study is basically a qualitative research, and used both primary and secondary source of
data. The secondary data is obtained by re
viewing the various regulatory frameworks and
directives of Micro
-
financing in Ghana since 2008 up to date to establish the extent to which
Microfinancing institutions are being regulated. The secondary data is obtained by interviewing
the regulator and t
he apex bodies of the micro
-
financial institutions in the country.
The findings of this study show that sources of funding permissible to the Micro
-
financial
institutions determines the nature of regulatory requirements and the extent of supervision. It
also revealed that consumer protection, building strong and stable micro
-
financial
-
institutions
and financial system as a whole in a country is the rationale for calling for the regulation of the
financial sector. The major challenges identified are inadeq
uate logistics and staff; poor
infrastructure base and low literacy level of some owners and officers of the micro
-
financial
-
institutions.