Question

2. Given the recent collapse of banks and MFIs and the strengthening of the regulations governing the operations of the financial industry in the country, how do you assess the future of MFIs in Ghana? Suggest what could be done (if need be).

Answer 1

Future of micro financial industry in Ghana is looking bright as there has been a strong formulation of rules and regulation regarding disclosure procedure with regards to micro financing industry in the country and it is focused at absolute disclosure requirement in order to protect the interest of the depositors and also protect the interest of the Other stakeholders of the financial institution because collapse of financial institution is highly contagious in nature and it can spread to entire economy and it has a widespread impact other than financial market also.

When there is a collapse of banks and micro financial industries in Ghana, the regulatory authority were very much proactive in determining such regulation which will incorporate the interest of shareholders and it will also promote a high level of maintenance of capital adequacy ratio in order to help the bank to deal with adverse economic scenarios, and It will also change the rule required with recording of asset values in order to have a better asset quality and its assets should not turn bad in the event of economic crisis.

The overall purposes of these reforms are to stabilize the overall financial sector as financial sector is considered to be a lifeblood of the whole economy and if the financial sector is controlled, then the economy could survive and prosper, so there was a high need to incorporate such regulation into the practices of financial organisation to encourage fair practices and disclosure requirement to protect the interest of the stakeholders in Ghana