Disruptions and the protracted effects of the COVID-19 lockdown in the non-bank financial institution sector in Ghana

This paper assesses disruptions in the non-bank financial institution (NBFI) sector and the protracted effects of COVID-19 and the lockdown on the NBFI sector. The paper focuses on microfinance institutions in Ghana using rapid response survey data obtained from the Ghana Microfinance Institutions Network between January 2020 and April 2020. Poor corporate governance, improper documentation of transactions, and impaired loan portfolio among others were antecedents to the disruptions. Regarding the lockdown effects, we found that savings value contracted and the possibility of a further deteriorating portfolio is anticipated thus reducing interest income. The use of digital channels of delivering savings and loan products increased while the physical delivery channel decreased. The regulator needs to have a second look at microfinance regulation in Ghana. Policy should focus on expanding and upscaling the use of digital and remote banking means in reaching out to clients.