USD 50M Microfinance Fund Established in Ghana
Friday, August 26, 2005
ACCRA: The Ghanian government has set up a 50 million-dollar microfinance fund to be disbursed to small-scale businesses in rural communities under the Ghana Poverty Reduction Strategy (GPRS). Papa Kofi Mensah, Micro-Finance Coordinator, Office of the Senior Minister, who announced this at the annual review of the Social Investment Fund (SIF) in Accra on Thursday, said that office would be the main coordinator of the fund.
He said an independent body that comprised stakeholders with interest in micro-finance would be constituted to administer the fund to ensure its effective management.
Papa Mensah said the committee would consequently be tasked to guide government on policy formulation, capacity building and selection of beneficiaries as well as other relevant regulations regarding disbursement and recovery of loans.
It would also assess the impact of the current interest rate on micro loans and suggest common interest and recovery rates that would not be more than the market rates and thus reduce difficulties in accessing funds.
Ms Ama Serwaa Dapaah, Executive Director of SIF, said the Fund, which was established with the combined effort of government and other economic partners, with intended total project cost of 22.8 million dollars had to date disbursed 22.9 million dollars.
The disbursement, which included money from the Highly Indebted Poor Countries (HIPC) Fund, covered socio-economic sub-projects of 108 districts that benefited about 1.2 million poor people.
She said the fund was designed to serve as a flexible vehicle aimed at delivering assistance to poor communities in support of sustainable poverty reduction particularly sub-projects crafted and implemented by Community-Based Organisations (CBOs).
Ms Dapaah said the major sub-component of the SIF was Micro-Finance Scheme that supported productive and income-generating activities through a revolving credit programme.
The Scheme makes resources available to indigenous Micro-Finance Institution (MFIs) for on lending to targeted clients. “The fund management unit has so far transferred 1.2 million dollars to the loan fund at the ARB Apex Bank to be disbursed to the partners of MFIs for lending to the various beneficiary groups.” It has also provided about 12,262 micro-loans out of which 9,304 were for female borrowers. 25 Aug. 05