Small loans for Ghanaian traders and artisans
In Ghana, microcredit is provided by savings and loans companies such as Sinapi Aba or Advans, rural banks, credit unions, the public MASLOC fund and mobile micro-loans, often through solidarity groups with weekly repayments.
A sector cleaned up after 2019
In 2019, the Bank of Ghana revoked the licences of 347 insolvent or dormant microfinance companies. The remaining sector is more concentrated, and deposits at licensed institutions are now covered by the Ghana Deposit Protection Corporation.
Leading savings and loans companies
Sinapi Aba, Opportunity International Savings and Loans and Advans Ghana finance market women, seamstresses and small food processors. They combine compulsory savings, group loans and individual loans as the borrower builds up a repayment track record.
Rural and community banks
More than a hundred rural and community banks, coordinated by ARB Apex Bank, serve rural districts and small towns. They know their customers locally and finance farming, trade and crafts with amounts suited to incomes in the district.
Credit unions and cooperatives
Credit unions affiliated to the Ghana Co-operative Credit Unions Association lend to their members, often employees of the same company, teachers or members of a church congregation. The loan generally depends on the savings the member has already built up.
Susu as the gateway to microfinance
The collector comes by every day to gather a few cedis from traders at Makola or Kejetia. After several months of regular contributions, the partner institution can grant a small loan based on this proven savings discipline.
MASLOC, the public small loans fund
The Microfinance and Small Loans Centre grants microcredit and in-kind loans, such as commercial vehicles or tricycles, to people excluded from banks. Its programmes vary according to government priorities and the annual budgets allocated to it.
Digital micro-loans on MTN MoMo
Micro-loans are approved within minutes through MTN MoMo or Telecel Cash, in partnership with banks. Their cost, measured over a term of a few weeks, is high, and every late payment is passed on to the credit bureaus.
Group lending in Ghanaian markets
Group loans bring together five to thirty people who guarantee one another. The system makes it possible to borrow without a title deed or a salary, but it exposes each member to paying the share of a defaulting market neighbour.
The real cost of a cedi microloan
Rates are unregulated and often quoted per month or as a flat charge. Added to processing fees, insurance and blocked savings, they produce an annual cost well above that of an ordinary bank loan for a salaried customer.
Checking that an institution is licensed
The Bank of Ghana publishes the list of authorised banks, specialised deposit-taking institutions, money lenders and microfinance companies. Any outfit missing from that list that promises loans or collects savings should never receive your money.
From microcredit to business finance
A trader who has repaid several cycles can qualify for larger amounts, or even financing for people without salaried work in Ghana. Loans between relatives and the rotating susu often complement these microloans.
A look at Ivorian microfinance
In Côte d'Ivoire, decentralised financial systems are subject to a rate ceiling common to the WAEMU zone, which does not exist in Ghana, as the page on microcredit in Côte d'Ivoire shows in more detail.
Getting a microloan in Ghana
- Check that the institution appears on the list published by the Bank of Ghana before depositing any savings.
- Open a savings or susu account and contribute regularly for the period the institution requires.
- Join a solidarity group or present a guarantor, then attend the compulsory training run by the loan officer.
- Describe your business, its location and income to the officer who visits your stall or workshop.
- Sign the contract, receive the funds in cash, to an account or a MoMo wallet, and repay on the weekly schedule.
What a microloan costs in Ghana
| Element | Common practice | What makes it vary |
|---|---|---|
| Interest rate | Often quoted per month or as a flat charge | Institution, loan cycle, amount |
| Processing fee | Percentage deducted at disbursement | Amount and type of loan |
| Compulsory savings | Share of the loan blocked as security | Group and institution rules |
| Credit insurance | Small premium linked to the amount | Term and borrower's age |
| MoMo micro-loan | Flat fees over a few weeks | Transaction history, network operator |
Documents for a microloan in Ghana
- Ghana Card
- Recent passport photo
- GhanaPostGPS address or a precise description of the business location
- Susu card or savings statements
- MTN MoMo or Telecel Cash history
- Commitment from the solidarity group members or the guarantor
What to avoid in Ghanaian microfinance
- Handing contributions to a susu collector not attached to a licensed institution, who can vanish with months of savings.
- Taking out one microloan to repay another, which quickly leads to a debt spiral with several lenders in the same market.
- Joining a solidarity group without knowing the other members and having to pay their instalments when they default.
- Paying membership fees to a fake microfinance outfit on social media promising large loans with no collateral.
- Neglecting a MoMo micro-loan in arrears, reported to the credit bureau and visible when applying to a rural bank.
Questions about microfinance in Ghana
Are deposits in a Ghanaian microfinance institution protected?
Deposits at licensed banks and specialised deposit-taking institutions, including savings and loans companies and rural banks, are covered by the Ghana Deposit Protection Corporation up to a ceiling. An unlicensed outfit offers no protection whatsoever.
What is MASLOC in Ghana?
The Microfinance and Small Loans Centre is a public agency that grants small loans and equipment on credit to low-income people. Its terms, products and target groups change with successive governments and their budget allocations.
Can I get a microloan in Ghana without a bank account?
Yes. Many institutions open a savings or susu account for the client themselves and can pay the loan into a mobile money wallet. The Ghana Card, however, remains essential for opening any account at all.
Why do Ghanaian microfinance lenders ask for savings first?
Savings show the ability to set money aside regularly and often serve as partial security. They are blocked for the duration of the loan, which raises the effective cost of credit for the borrower.