Cape Coast, Jan. 5, GNA - The Minister for Private Sector Development and PSI, Mr Kwamena Bartels, on Thursday described micro financing as the response to a vision that builds financially self-sufficient organisations that provide financial services on sustainable basis to the poor.
He said through micro financing, it was possible to impact positively on poverty levels without having to depend on direct interventions from the Government and donor subsidies. Mr Bartels made the observation in an address read for him at the opening session of a two-day workshop on " micro-finance capacity building for poverty reduction," at the University of Cape Coast (UCC). It is being jointly organised by the Faculty of Social Sciences of the UCC and the University for Development Studies (UDS) for operators in the micro financing sector, to 'partner stakeholders' to develop and deliver comprehensive programmes to help build the human capital within the sector.
The participants would deliberate on topical issues such as strategies for developing micro finance institutions, capacity building and transformation of micro finance institutions, prospects and challenges.
Mr Bartels said micro finance served "as a beacon of hope" in Ghana in areas where local banks had considered un-bankable, pointing out, that studies had shown that majority of the extremely poor could use small loans effectively.
He said micro finance institutions (MFIs) could serve clients and still cover their overheads through simple and cost-effective strategies.
"Indeed the major reasons why micro finance is the key to achieving the Millennium Development Goals (MDGs) is the result of its impact on the poor who use loans not only for business investment, but also for health, education and managing household emergencies as well as other critical requirements," He stressed.
The Minister noted that it was in this regard, that the micro finance policy, currently being developed, should map out ways in which the 250 MFIs could align divergent interests of various stakeholders.
He explained that for the sector to work effectively, it was necessary that the MFIs were fashioned out to respond to the needs of clients and Government's overall vision of realizing the private sector as the Golden Age of Business.
Mr Bartels said there was therefore, the need to tackle critical issues such as how to improve on micro finance delivery services, to micro enterprises as well as how to achieve sustainability and growth of the industry.
He therefore, tasked the MFIs to endeavour to improve on their capacity and develop systems to enable them understand needs of their clients better and to monitor the effectiveness of their strategies in serving the poor as well as achieving their social mission. Mr Bartels, asked the Faculty of Social Sciences of UCC to come out with best practices in capacity building initiatives for the sector, and a presentation on "benchmarking process" to enable the country set relevant indicators which could measure the nation's success in the micro finance industry.
Professor Kofi Awusabo-Asare Dean of the Faculty of Social Science of the UCC; said the workshop was their contribution towards enhancing objectives for the declaration of 2005 as the International Year of micro-credit.
He said although the declaration officially ended about five days ago, it was a call for action and provided the nation with an opportunity to reflect on the significant role of micro-finance generally.
Professor Awusabo-Asare said it would in addition, enable stakeholders develop requisite programmes towards the development of the sector.
On the universities' role in organizing the workshop, he observed that outreach, which was one of the universities' traditional roles, had not been given much attention and recognition, stressing that universities were to "provide directions and alternative paths to thoughts and actions."
He announced that in addition to the workshop, a two-week training programme in micro finance for practitioners would be organised from Monday January 9, and appealed to the MFIs to sponsor their employees to the programme.
Goodwill messages from the Ghana Micro Finance Institutions Network (GHAMIN), ARB Apex Bank, the Bank of Ghana, Micro Finance and Small Scale loans Centre (MASLOC) of the Office of the President and the Credit Unions Association of Ghana, all underscored the importance of micro finance for poverty reduction.