Liquidity Management in Ghanaian Savings and Loans. A Case Study of Golden Link Savings and Loans Limited

Abstract

The purpose of the study was to determine liquidity management in Ghanaian savings and loans with the case study of Golden Link Savings and Loans. A large body of research theoretically asserts positive association between good liquidity management and financial performance of financial institutions. Little attention has been paid to the liquidity management of Golden Link Savings and Loans which are contributing direct to the welfare of the citizen and economy growth. This research addresses some conceptual and measurement issues related to the study of liquidity management and its effects on financial performance of Golden Link Savings and Loans in a Ghanaian context. A total of 200 questionnaires were distributed but only 160 were retrieved from the respondents. Also, secondary data was collected from their published financial statement between years 2012 to 2017. Golden Link Savings and Loans was the source of data and hence the reliability of the data. The researcher used descriptive statistics, chi-square analysis and correlation efficient method. In order to test this relationship regression analysis was run with total profit before tax to total assets as the dependent variable and the liquidity, funding liquidity risk, operational efficiency, and quick ratio log of total assets as the independent variables. The findings were that financial performance as measured by profit before tax over total assets is positively related to Liquidity, funding liquidity risk, operational efficiency, quick ratio and log of total assets. The study therefore recommends that Golden Link Savings and Loans should put in place the best liquidity management practices to increase their financial performance.