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The Ghanaian microfinance market strengthened throughout 2010 as inflation rates returned to manageable levels after the performance-inhibiting inflation spikes of 2009. The sector does however remain very diverse and fragmented in terms of types of MFI actors operating as well as the range of services offered. New guidelines and regulations issued by the Bank of Ghana in 2011 will have a direct effect on how the entire microfinance sector operates and will increase the supervisory and regulatory role of the country’s Central Bank. Detailed analysis of how these new regulatory laws are likely to impact different types of MFIs can be found throughout the Ghana Country Briefing:

• Overview: Five general types of MFIs operate in Ghana with each type offering a different range of financial products and services, and each held to its own particular regulatory guidelines.
• Supply & Demand: Improving macroeconomic conditions in 2010 have contributed to a rise in demand for microfinance services across the five general MFI types.
• Funding: Customer deposits represent the primary source of lending capital throughout the sector, with the exception of ‘Financial NGOs’ that are not permitted to take voluntary customer deposits. MFI borrowing is extremely concentrated, with one FNGO accounting for about 40% all borrowing in the sector.
• Performance: The quality of loan portfolios improved across the sector in 2010 with PAR > 30 indicators decreasing due to improved macroeconomic conditions. Financial performance trends varied in 2010 with smaller MFIs seeing better results than larger MFIs.

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