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Incentives include the reduction of taxes and capital requirements for companies moving into the rural areas
Incentives include the reduction of taxes and capital requirements for companies moving into the rural areas

Provide incentives to extend microfinance services to rural areas - GHAMFIN

The Ghana Microfinance Institutions Network (GHAMFIN) is pushing for the provision of incentives for microfinance service providers to extend their services to rural areas.

GHAMFIN, which comprises the apex bodies of different microfinance actors, posits that the current microfinance landscape is  largely concentrated in Accra and Kumasi, hence the need to extend services to the rural areas to deepen financial inclusion.

To this end, the network has initiated discussions with the Ministry of Finance, to initiate a policy that will make provisions for incentives for companies who are ready to move out of their comfort zones and venture into areas that are predominantly not viable.  

The Executive Director of GHAMFIN, Mr Yaw Gyamfi told the Daily Graphic that extending microfinance services to the urban areas would help consolidate moves to deepen financial inclusion in the country.

“When you look at most of our institutions, they are located in the urban areas. But we are preaching financial inclusion so what do we do.? We have had discussions with the Ministry of Finance to look at policies that will look at providing some incentives for companies that will move out of their comfort zone, because the monies are in the urban areas so to tell somebody to go into an area that is primarily not too viable, then there must be something at stake,” he said.  

Mr Gyamfi said GHAMFIN was looking at having these incentives in place by first quarter 2017, adding that although it was feasible, “we need to work hard towards it. For us, we have to start working on our own and make sure that we have something running by that time.”

Proposed incentives

According to GHAMFIN, some of the incentives they have proposed include the reduction of taxes and capital requirements for companies moving into the rural areas. 

“Some of the suggestions we put on the table are;  can we have some tax reductions for them and also some form of reduction in the minimum capital requirements. This is because in the villages you don’t need GHC2 million to operate. You will need smaller amounts to operate in such areas,” he said. 

He also added that there was the need to have funds readily available to help the companies provide reduced interest rate loans to farmers in agriculture predominant areas. 

“What will work again is when you have funding for people who would want to work in such areas. For instance, in an agriculture predominant area, there should be funding to support the chain over there; we can have reduced interest rate loans so we can lend to the farmers there,” he added. 

Microfinance seminar

Through a GHAMFIN initiative, a seminar on Ghana’s Microfinance sector was held for financial journalists in Accra. Participants at the seminar were members of the Institute of Financial and Economic Journalists (IFEJ) and the Journalists for Business Advocacy (JBA).

The aim of the workshop was to expand the knowledge base of journalists on the sector to improve their reportage of issues. 

The President of IFEJ, Mr Lloyd Evans urged journalists to take up the challenge of churning out well informed stories on the sector to educate the populace rather than focusing on event based stories. 

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