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Transparent Pricing In Ghana

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# BorrowersPortfolio (US$)ProductsTransp. IndexParticipating SinceAge of Data
AGFS20047,0002212011-Dec28 mos.
Ahantaman RB23,8009,896,0004512011-Dec10 mos.
APED13,7001,876,0002342011-Jun10 mos.
ASA Initiative4,400577,0004512011-Dec10 mos.
ASA-Ghana71,60018,385,0002432011-Dec10 mos.
ASPI80088,0006262011-Dec10 mos.
Atwima Kwanwoma3,8001,788,0002272011-Dec10 mos.
Baobab5,100967,0002482011-Dec10 mos.
BestFUND13,0004,172,0003492011-Dec10 mos.
Bonzali Rural10,4001,691,0004322011-Dec28 mos.
CashPhase83135,0002382011-Dec10 mos.
CASUD1,100524,0001422011-Dec10 mos.
CEDEF50054,0004992011-Jul10 mos.
CFF10013,0001332011-Sep10 mos.
CRAN3,6001,019,0002372011-Dec10 mos.
DQF1,70063,0002382011-Dec10 mos.
EASL9,20011,409,0006532013-Jul10 mos.
East Mamprusi12,5002,268,0004392011-Dec10 mos.
ELDA000N/A2011-Dec10 mos.
EMPRETEC Ghana20056,0002422011-Dec10 mos.
FASL13,50014,047,0008342013-Jul10 mos.
Grameen Ghana9,500507,0003642011-Dec10 mos.
ID-Ghana5,600953,0003522011-Dec10 mos.
Innovative Finance2,700354,0003292011-Dec10 mos.
Kraban Support7,700781,0005482011-Dec28 mos.
KRB4,0006,350,0003352011-Dec10 mos.
Lower Pra RB34,0006,316,0003372011-Dec28 mos.
Maata-N-Tudu12,000941,0004662011-Dec10 mos.
Mail Finance300288,0001232011-Dec10 mos.
Markaz000N/A2011-Dec10 mos.
Markaz Al Bishara10017,0001592011-Dec10 mos.
MicrofinPlus Gh1,100251,0002342011-Dec10 mos.
Nwabiagya RB4,0002,265,0003332011-Dec10 mos.
OISL62,00027,232,0009412011-Dec10 mos.
Pro Credit000N/A2011-Dec10 mos.
Rich Step100101,0001172011-Dec10 mos.
SAT147,60029,359,0004242011-Dec10 mos.
Sekam Trust600137,0002242011-Dec10 mos.
Simli Pong8,900463,0003472011-Dec28 mos.
SS Ghana20035,0001272013-May10 mos.
TCCU10032,0003302011-Dec10 mos.
The Bridge40032,0003442011-Dec28 mos.
Union RB3,8002,361,0004452011-Dec10 mos.

Caps / Zoom options
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 savings
Country InstAbbrev SampleCode Loan Amount USD Loan Term (Months) SampClients FullAPR
Loading...
X Axis
Greater than: 0 b2 b3 b4 b5
Less or equal to: b1 b2 b3 b4 b5
N (# of Samples)
Total Borrrowers of Samples
Avg
Min
Max
Std Dev
By Inst Type
By Country

Total Borrowers of Samples

X Axis
Greater than: 0 b2 b3 b4 b5
Less or equal to: b1 b2 b3 b4 b5
0%
33%
66%


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