Abstract:
The inability and challenge faced by the micro and small scale enterprises (MSEs) to obtain institutional credit to support their operations prompted the National Board for Small Scale Industries (NBSSI) to institute microcredit schemes to supply credits to support the MSEs in Ghana.
The objective of this study was to evaluate the performance of the NBSSI microcredit programme. An explorative case study approach was employed using secondary data, being reports produced on the schemes operations from the period of 2005 to 2012. The data were grouped and analyzed under selected ratios used by the microfinance industry, with the assistance of a data analysis tool, Microsoft Excel 2010, and the results represented in the form of graphs and tables.
It was established from the study that, the schemes suffers from, inadequate loanable funds; have high default rate; highly exposed to credit risk; generates low income (interests and service) from its operation; deepens greatly on subsidies to support its operations; and lacks basic efficient operating policies and management practices.
To improve upon the performance of the scheme, it was recommended that, the Legislative Instrument (L.I.) establishing the NBSSI be amended to empower the Board to source commercial loanable funds to boost it portfolios; must shift from individual lending to group base lending; price it loans commercially; involve its district officers (BACs) in the loan monitoring; avoid solely depending on external subsidies to support its operations; and must adopt efficient operating policies and practices to reduce portfolio risks and safeguard the schemes.
