Abstract:
The study examined the outreach and sustainability of the inventory
credit programme (ICP) in Ghana using both qualitative and quantitative data
between 1996 and 2003. The findings revealed that the outreach of the ICP reached
the poor with a depth of 25-47% (nationwide) measured in terms of loan size/GNP
per capita. The outreach measured in terms of percentage of female clients served
was initially 20%, but fairly increased to 59% over the study period. However, a
comparative analysis with two successful MFIs in Ghana and standardised
performance benchmarks indicate that the ICP did not perform well in reaching the
very poor. The results of the financial performance indicate that the ICP was
operationally and financially sustainable. Further, the study showed that the ICP
had high loan recovery rate which underlies its profitability. However, the ICP
operated with a low efficiency measured in terms of adjusted operational expenses
ratio. Based on these findings the study concludes that there is a trade-off between
outreach to the poorest and a financial sustainability of the ICP which can be
mitigated by the enhanced credit allocation through lower cost structures
