Question

Ministry of Finance and Economic Planning in Ghana has recognized the need to support the rural economy in Ghana as a means of improving Inclusive Finance and Economic Growth in the country. You have been selected as a main consultant to assist the government. The ministry expect you to perform the following function

b) Examine the effect of COVID-19 on the activities of Rural and Community Banks including microfinance institution in Ghana?

Answer 1

Effect of covid-19 has led to a wide collapse in the overall demand and supply structure in the rural economy of Ghana. My observations are as follows-

A. The rural economy is generally dependent upon the high level of demand and supply structure for their products but the economy has been facing up with shrinkage of demand.

B.the microfinance industries are majorly focused at providing loans to this rural industries and their has been shrinkage in the demand of loans.

C. There is a risk of shutting down of operations in the case of many microfinance business as their future prospect are not looking bright

D.the Assets on the books of micro financial industries have collapsed and they have lost a wide amount of their value so it has lead to overall reduction in the books of accounts

E. It has also lead into to decrease into the supply of agricultural goods and due to the economy shutting down a lot of crops which have been harvested have completely be wasted

there is a need on the part of the government to stimulate the demand into the overall rural economy in order to support the micro financial system and they also need to provide them with the better capitalisation opportunities and bailouts in near future which can be arising out of shutting down of microfinance business.