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Exploring Innovations in Microfinance Institutions in Northern Ghana

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  • Stanley Kojo Dary
  • Haruna Issahaku

Abstract

This paper explored innovations offered by microfinance institutions (MFIs) operating in the three northern regions of Ghana. A sample of 41 MFIs comprising savings and loans companies, credit unions, and rural banks were surveyed. Data were analysed using descriptive statistics and analysis of variance (ANOVA). The study found that MFIs in the three northern regions have introduced a wide range of innovations in the past 3 years. These innovations that have been employed at varying degrees include product innovation (savings, and loans), marketing innovations, microinsurance, location innovation, and R&D innovation. On the basis of the introduction of new loan products in the past 3 years, 4.9%, 39%, 36.6%, and 19.5% of MFIs were found to be potential innovators, slow innovators, moderate innovators and high innovators respectively. The study established significant relationship between company characteristics such as frequency of board meetings, educational profile of staff, ownership structure, number of branches/outlets, years of operation, company location, and some indicators of innovation. The adoption rate of microinsurance is found to be very low (14.6%) among MFIs. Due to the fact that innovations come with risks, MFIs are admonished to perform risk analysis before implementing innovations. This will enable them develop effective mechanisms to address potential risks associated with the introduction of innovations.

Suggested Citation

  • Stanley Kojo Dary & Haruna Issahaku, 2013. "Exploring Innovations in Microfinance Institutions in Northern Ghana," Business and Economic Research, Macrothink Institute, vol. 3(1), pages 442-460, June.
    • Handle: RePEc:mth:ber888:v:3:y:2013:i:1:p:442-460
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    References listed on IDEAS

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    3. Alex Addae-Korankye, 2012. "Microfinance and Poverty Reduction in Ghana. The Case of Central Region of Ghana," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(1), pages 135-141, March.
    4. Terberger, Eva, 2003. "Microfinance institutions in the development of financial markets," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    5. Jeroen de Jong & Patrick Vermeulen, 2004. "Determinants of product innovation in small firms: A Comparison Across Industries," Scales Research Reports N200410, EIM Business and Policy Research.
    6. Marguerite S. Robinson, 2001. "The Microfinance Revolution," World Bank Publications - Books, The World Bank Group, number 28956.
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    Cited by:

    1. repec:arp:sjefsm:2021:p:136-148 is not listed on IDEAS
    2. Ruoyun Liu & Zhan Wang & Stavros Sindakis & Saloome Showkat, 2024. "Unlocking Financial Inclusion Through ICT and Mobile Banking: A Knowledge-Based Analysis of Microfinance Institutions in Ghana," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 9723-9755, June.
    3. Emmanuel Ofori & Kenichi Kashiwagi, 2022. "Impact of Microfinance on the Social Performance of Local Households: Evidence from the Kassena Nankana East District of Ghana," Sustainability, MDPI, vol. 14(10), pages 1-25, May.

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    More about this item

    Keywords

    Microfinance institutions; Microinsurance; Product innovation; Marketing innovation; Microfinance;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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