The Transparent Pricing Initiative in Ghana has published standardized pricing data from 40 microfinance providers, representing an estimated 76% of the market by number of borrowers and 72% by gross loan portfolio. Launched in 2011 the Initiative is delivered in partnership with Planet Rating and Ghana Microfinance Institutions Network (GHAMFIN), and is funded by the MasterCard Foundation.Microfinance in Ghana
Ghana’s microfinance industry was included in the national bank’s regulatory and supervisory framework relatively recently. The Operating Rules and Guidelines for MFIs issued in July 2011 by the Bank of Ghana laid out the fundamental regulatory framework for microfinance institution tiers. Although the guidelines did not incorporate specific provisions addressing consumer protection and responsible finance, the Bank of Ghana houses the Investigation and Consumer Protection Office (ICPO) which works towards promoting consumer protection and educates on consumer rights and responsibilities. The national microfinance network, GHAMFIN, has also become active in the field of consumer protection, and has been working with several initiatives, including SPEED Ghana and MFTransparency to improve consumer protection within the microfinance sector.
The price graph presented below shows the prices of all the microloan products in the Ghana dataset. Each data-point represents a real loan given to a real borrower, calculated using original loan documentation from the institution. The size of the data-point correlates with the number of borrowers that have a loan of that product at that loan amount. The color of the data-point correlates with the Transparency Index of the sample. The interactive legend beneath the graph can be used to change the graph axis and labels. Try the custom feature to see price correlations with attributes such as loan purpose, institution type, loan term and percent of gross national income.
The price curve, i.e. the average market rate, for Ghana shows that the smaller in size a microloan is, the higher the price incurred by the borrower. This trend is true for all types of microfinance provider and all types of loan purposes included in the dataset. Within this trend a wide range in product prices is seen.
When calculated using a standardized APR formula which includes the impact of the interest rate, fees and insurance, a high range is seen in the price of the most expensive loan and the lowest priced loan. When weighted average APRs are considered the dataset revealed that the microloan prices charged in urban areas were, on average, more expensive than the price in rural areas. Ghana’s most common lending methodologies were individual lending and solidarity lending, forming 45% of the market share each. Mandatory insurance is demanded by around a quarter of microloans on offer in Ghana, and credit education as a free service is offered with approximately 23% of loan products.
|Institution||# Borrowers||Portfolio (US$)||Products||Transp. Index||Participating Since||Age of Data|
|Ahantaman RB||23,800||9,896,000||4||51||2011-Dec||32 mos.|
|ASA Initiative||4,400||577,000||4||51||2011-Dec||32 mos.|
|Atwima Kwanwoma||3,800||1,788,000||2||27||2011-Dec||32 mos.|
|Bonzali Rural||10,400||1,691,000||4||32||2011-Dec||50 mos.|
|East Mamprusi||12,500||2,268,000||4||39||2011-Dec||32 mos.|
|EMPRETEC Ghana||200||56,000||2||42||2011-Dec||32 mos.|
|Grameen Ghana||9,500||507,000||3||64||2011-Dec||32 mos.|
|Innovative Finance||2,700||354,000||3||29||2011-Dec||32 mos.|
|Kraban Support||7,700||781,000||5||48||2011-Dec||50 mos.|
|Lower Pra RB||34,000||6,316,000||3||37||2011-Dec||50 mos.|
|Mail Finance||300||288,000||1||23||2011-Dec||32 mos.|
|Markaz Al Bishara||100||17,000||1||59||2011-Dec||32 mos.|
|MicrofinPlus Gh||1,100||251,000||2||34||2011-Dec||32 mos.|
|Nwabiagya RB||4,000||2,265,000||3||33||2011-Dec||32 mos.|
|Pro Credit||0||0||0||N/A||2011-Dec||32 mos.|
|Rich Step||100||101,000||1||17||2011-Dec||32 mos.|
|Sekam Trust||600||137,000||2||24||2011-Dec||32 mos.|
|Simli Pong||8,900||463,000||3||47||2011-Dec||50 mos.|
|SS Ghana||200||35,000||1||27||2013-May||32 mos.|
|The Bridge||400||32,000||3||44||2011-Dec||50 mos.|
|Union RB||3,800||2,361,000||4||45||2011-Dec||32 mos.|