What Drives Commercial Microfinance Institutions into Bankruptcy in Ghana?


End date: 30 June, 2015 Project type: BSU Students' Master Thesis Project code: mge13-2B1 BSU Countries: Ghana Lead institution: Roskilde University (RUC), Denmark Policy Brief: Link to the full thesis published at Roskilde University Library: Project coordinator: Godwin Festival Boateng

Project summary

The mountain of criticisms leveled against the microfinance project is largely founded on the claim that microfinance institutions (MFIs) are unethically making egregious profits from the sweats and in the name of poor people. Both the pro and critical literature unanimously point to the fact that the industry is financially viable – they only part ways on who benefits from the profit. The taken position of this study to investigate what drives commercial MFIs into bankruptcy therefore clearly contradicts received wisdom. How could institutions seen as making profits (critics even say excessively) be at the same time running to Chapter 11? Is it the case that the MFIs do not experience profit as claimed? Could it be commercialization sowing its own seed of destruction? Or it is about management and governance and/or different factors including regulation?

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