Microfinance Pricing In Ghana - MFTransparency.org

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 long history of informal savings and credit has created a microfinance sector today that, in terms of operational and financial sustainability, is considered to be one of the most developed in West Africa. Issues of consumer protection and social performance are now gaining increasing momentum in within Ghana’s microfinance sector. Seeing it as an important tool in addressing poverty, the government has played an instrumental role in reforming policy framework and in channelling much needed funds to the sector. MFTransparency’s 2011 figures show the Ghanaian microfinance sector manages a gross loan portfolio of GHS 276 million and is accessed by an estimated 561,000 active borrowers.

Truth-in-Lending Legislation

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.

Ghana Price Graph

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.

Ghana Institutions

Institution	# Borrowers	Portfolio (US$)	Products	Transp. Index	Participating Since	Age of Data
AGFS	200	47,000	2	21	2011-Dec	119 mos.
Ahantaman RB	23,800	9,896,000	4	51	2011-Dec	101 mos.
APED	13,700	1,876,000	2	34	2011-Jun	101 mos.
ASA Initiative	4,400	577,000	4	51	2011-Dec	101 mos.
ASA-Ghana	71,600	18,385,000	2	43	2011-Dec	101 mos.
ASPI	800	88,000	6	26	2011-Dec	101 mos.
Atwima Kwanwoma	3,800	1,788,000	2	27	2011-Dec	101 mos.
Baobab	5,100	967,000	2	48	2011-Dec	101 mos.
BestFUND	13,000	4,172,000	3	49	2011-Dec	101 mos.
Bonzali Rural	10,400	1,691,000	4	32	2011-Dec	119 mos.
CashPhase	83	135,000	2	38	2011-Dec	101 mos.
CASUD	1,100	524,000	1	42	2011-Dec	101 mos.
CEDEF	500	54,000	4	99	2011-Jul	101 mos.
CFF	100	13,000	1	33	2011-Sep	101 mos.
CRAN	3,600	1,019,000	2	37	2011-Dec	101 mos.
DQF	1,700	63,000	2	38	2011-Dec	101 mos.
EASL	9,200	11,409,000	6	53	2013-Jul	101 mos.
East Mamprusi	12,500	2,268,000	4	39	2011-Dec	101 mos.
ELDA	0	0	0	N/A	2011-Dec	101 mos.
EMPRETEC Ghana	200	56,000	2	42	2011-Dec	101 mos.
FASL	13,500	14,047,000	8	34	2013-Jul	101 mos.
Grameen Ghana	9,500	507,000	3	64	2011-Dec	101 mos.
ID-Ghana	5,600	953,000	3	52	2011-Dec	101 mos.
Innovative Finance	2,700	354,000	3	29	2011-Dec	101 mos.
Kraban Support	7,700	781,000	5	48	2011-Dec	119 mos.
KRB	4,000	6,350,000	3	35	2011-Dec	101 mos.
Lower Pra RB	34,000	6,316,000	3	37	2011-Dec	119 mos.
Maata-N-Tudu	12,000	941,000	4	66	2011-Dec	101 mos.
Mail Finance	300	288,000	1	23	2011-Dec	101 mos.
Markaz	0	0	0	N/A	2011-Dec	101 mos.
Markaz Al Bishara	100	17,000	1	59	2011-Dec	101 mos.
MicrofinPlus Gh	1,100	251,000	2	34	2011-Dec	101 mos.
Nwabiagya RB	4,000	2,265,000	3	33	2011-Dec	101 mos.
OISL	62,000	27,232,000	9	41	2011-Dec	101 mos.
Pro Credit	0	0	0	N/A	2011-Dec	101 mos.
Rich Step	100	101,000	1	17	2011-Dec	101 mos.
SAT	147,600	29,359,000	4	24	2011-Dec	101 mos.
Sekam Trust	600	137,000	2	24	2011-Dec	101 mos.
Simli Pong	8,900	463,000	3	47	2011-Dec	119 mos.
SS Ghana	200	35,000	1	27	2013-May	101 mos.
TCCU	100	32,000	3	30	2011-Dec	101 mos.
The Bridge	400	32,000	3	44	2011-Dec	119 mos.
Union RB	3,800	2,361,000	4	45	2011-Dec	101 mos.

Ghana

# Institutions:	43
# Borrowers:	493,983
Portfolio (US$):	$147.9 Mil
Products:	124
Transp. Index:	40
Participating Since:	2011-Jun
Update Frequency:	Yearly

Ghana MIX Market Profile
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Key Statistics
# Samples:
# Products
# Institutions
# Countries
# Borrowers
Loan Portfolio (USD)
% Products using declining balance
% Products with one or more fee
% Products with one or more insurances
% Products with compulsory deposits

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N (# of Samples)
Total Borrrowers of Samples


Avg
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By Country

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Transparent Pricing In Ghana

Ghana Institutions

Ghana

Total Borrowers of Samples