William F. Steel

Effects of Mobile Phone Use on Artisanal Fishing Market Efficiency and Livelihoods in Ghana

This article assesses the effects of mobile phone use on the artisanal fishing industry in the Effutu Municipality of Ghana. It contributes to the growing literature on how mobile telephony can help overcome market inefficiencies in developing countries due to imperfect information. The study shows how mobile phone use among fishermen has enhanced the efficiency of input and output markets for artisanal fishing and improved their businesses relations and livelihoods. The ‘before and after’ approach was used, based on interviews with fishermen and other supply chain actors on ways in which fishermen bought inputs and sold fish, and their perceptions of the effects of the mobile phone. The results indicate that market efficiencies improved and price variations reduced as a result of better availability of up‐to‐date information. Use of mobile phones enabled fishermen to improve their incomes, expand their markets, feel more secure at sea, and remain in closer touch with both families and other fishermen.

Regulation and Performance of Ghana’s Multi-tiered Rural and Microfinance Industry

The World Bank’s ‘Comparative Review of Microfinance Regulatory Framework Issues’ concludes that ‘recognizing different tiers of both regulated and unregulated institutions in a financial structure facilitates financial deepening and outreach’, yet warns that ‘legislation intended to promote microfinance may impose untenable supervisory burdens, while an excessively restrictive approach may constrict innovation and expansion’ (Gallardo et al., 2005, p. iii). Ghana represents a regulatory framework that has evolved to permit several tiers of both regulated and unregulated institutions engaged in microfinance, sometimes facilitating new institutional forms and sometimes responding to evolution of the market. Indeed, Ghana has been an innovator since the introduction of the first African credit union in 1955 and the first rural bank in 1976. It offers a contrast to countries that have only in the last decade created regulated tiers suitable for microfinance (for example, Uganda, Kenya), sometimes severely restricting their form (West African Monetary Union, Ethiopia), or that leave regulation to apex bodies (Bangladesh, Philippines; Meagher, 2002).

Going downmarket: Ghana's rural banks adapt informal savings methodology

A savings-and-credit scheme adapted by Ghanas rural banks from traditional informal methodologies is found to be effective in reaching unbanked clients and mobilizing additional domestic financial resources. Participation in the scheme transformed clients’ perception of the difficulties of saving and obtaining credit. Evidence indicated that accessing credit increased clients’ ability to purchase assets and support their household in education and health expenditures and decreased their tendency to spend on community social ceremonies. Nevertheless, the success of the scheme depends on methodologies used to mitigate risks of fraud and default: use of employees rather than autonomous agents; retention of savings of at least 50 per cent of loan amount; effective screening of loan applications, monitoring of both clients and mobile bankers; and good data systems.

Guest Editorial: Does ‘microfinance’ mean what it used to?

What does ‘microfinance’ really mean in these days of financial inclusion and digital financial services? Is ‘financial inclusion’ simply a rebranding of ‘microfinance’, that is itself a rebranding of ‘microenterprise credit’? In the 1990s, microfinance became recognized as a set of methodologies that can make provision of financial services to the lower-income, ‘unbanked’ population viable and affordable. ‘Banking for the poor’ involved managing the costs and risks that made commercial banks avoid small financial transactions and informal enterprises – largely by passing them on to clients via solidarity groups and by using dynamic incentives such as short repayment periods and gradually increasing loan sizes. Initially, ‘microfinance’ and ‘microfinance institutions’ (MFIs) were virtually synonymous – both implying outside the formal financial system.

Two decades of small enterprise development and microfinance

The focus of articles in this journal has shifted over two decades from specific, supply-driven interventions for small enterprises to a broader market development approach, including demand and intermediaries for private enterprises generally. Microfinance and business development services are increasingly being treated holistically through a value chain approach.