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Executive Summary

Executive Summary

The Money Lending Association Ghana (MLAG) is one of the umbrella organizations in the microfinance industry in Ghana. Its mission is to provide credit to economically deprived individuals and businesses in a regulated, market-driven environment to improve standards of living in Ghana. The Association is recognized by the Bank of Ghana and operates under Tier 3 and 4 of Bank of Ghana’s categorization of Micro Finance Institutions. The current active membership of the Association as at 2015, stood at 434 with representation from all the 10 regions in Ghana. The membership grew from 276 in 2013 to 434 in 2015 representing an increase of 57 per cent. The Money Lenders Association of Ghana is currently one of the key credible and reliable players in the microfinance industry which is providing affordable, flexible and sustainable financial services to their clients who largely operate in the informal economy.

Although MLAG can boast of its recognition and legal backing by Bank of Ghana, growing donor support for capacity building, availability of potential external funding-sources for on-lending, access to huge informal market, strong and committed leadership, growing membership and strong bargaining power. It is however, confronted with a number of challenges including limited funds for members, multiple borrowing, poor data-base and weak monitoring and evaluation systems, problem of illegal/unlicensed operators, unreliable macroeconomic conditions, unfavorable government policies, inadequate logistics and staff for the Secretariat, etc.

In order to address these challenges and to accelerate and direct the growth of the Association to be a strong player on the financial market in the country, the Association initiated a process to prepare a Strategic Plan in 2014. The Plan outlines the Vision, Core values, Strategic goals and objectives, key interventions, performance indicators, phasing and implementation responsibilities or actors for the various projects identified. The vision of MLAG under the Plan is “To be the most credible microcredit institution in Ghana that empowers its members to improve the living conditions of their clients”. The Plan seeks to implement eight Strategic Goals which have been prioritized as follows:

  1. To build the capacity of the Secretariat in terms of human resource development and logistics to ensure effective service delivery;
  2. To build and maintain effective and reliable management information systems for the organization;
  3. To develop and implement an effective monitoring and evaluation system;
  4. To explore access to sustainable and affordable sources of funding;
  5. To develop a comprehensive and long-term programme to build the capacity of its members in credit management;
  6. To embark on a vigorous financial literacy programmes for clients;
  7. To liaise with the regulatory bodies to ensure compliance with regulations, check illegal operations and multiple borrowing; and
  8. To contribute to the establishment of a credit referencing system for the organization.

The capacity building of the Secretariat is considered as a top priority because the success of the implementation of Strategic Plan will largely depend on it ability to oversee the entire implementation process. The essential logistics for effective operation of the Secretariat and the support-staff are critical for the successful implementation of the various interventions recommended by Strategic plan. In all, the Plan has identified about 50 specific implementable projects derived from the eight Strategic Goals aimed at transforming the fortunes of the Association and its clients. The strategic goals as well as the interventions have been prioritized and budgeted to ensure that resources are put to the best and optimum use. The implementation of the Plan is estimated to cost GHS 1,725,000 over a period of five years. The yearly costs of the plan have been categorized according to each strategic goal and the respective interventions.

It is expected that through the effective implementation of the plan, the Money Lenders Association of Ghana (MLAG) will position itself as a vibrant and leading player in the microfinance industry in Ghana providing financial services to the vast majority of households and individuals in urban and rural areas who want to access financial markets without cumbersome and bureaucratic bottlenecks characterizing the formal financial sector in Ghana.

It is expected that through the effective implementation of the plan, the Association will benefit from a strong and efficient Secretariat, an effective data management system, a functional monitoring and evaluation system, reliable sources of sustainable funding, a credible and operational credit reference system, a long term capacity building programme for the members and a vigorous financial literacy programme for the clients of association members.

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