History was made in micro-finance administration and development in Ghana yesterday when President John Agyekum Kufuor officially launched a $50m Micro-credit and Small Loans Fund, and inaugurated the Head Office of the Micro-Finance and Small Loans Centre in Accra.

With the launch of MASLOC, farmers, fishermen, fishmongers, petty traders, hairdressers, caterers, dress-makers and others in both the formal and informal sectors will have no cause to complain again about lack of finance since the Government will ensure that they access the fund.

The fund is expected to make sustainable financial services available to individuals, co-operatives and other groups in grassroot communities in order to help them generate wealth, save and expand their mini-enterprises, leading to urban and rural poverty reduction.

"[G]overnment has therefore prioritised micro-finance interventions under its GPRS I and II, hence the launch today of the $50m Micro-credit and Small Loans Fund which is unprecedented in the country's history. This is only the seed money. Government will continue to provide the resources to expand the scheme,” President Kufuor told the enthusiastic audience at the launch, largely made up of small and micro-enterprise operators from various parts of Accra.

It is the largest economic empowerment programme specifically designed to meet the needs of players in the Small-and Medium-Scale Enterprises in Ghana"s history.

Indeed, information available to The Statesman is that Government has already tasked District Assemblies across the country to come out with programmes that would make access to the Fund easier for people in the rural areas.

He asked micro-business owners and small-scale entrepreneurs such as craftspersons, mechanics, traders and hawkers to access the fund so as to improve their socio-economic standards; thereby alleviating poverty. “Let me state very clearly that a loan from the fund must not be viewed as a gift from government; neither must it be seen as a compensation due to any community for disparities in urban and rural economic development. Government expects prompt and full repayment so that others can enjoy the facility.”

The President noted that Government would continue to encourage the development and strengthening of grassroots institutions to enable them deepen their financial services outreach to remote areas in the country. Thus, credit unions, Susu operators, financial NGOs, Savings and loan companies are expected to participate in the running of the fund alongside the major manager, credit MASLOC.

The President stated that the management of the fund would be expected to use leveraging with other banks and financial sources to grow and make it an effective mechanism for the medium-to-long-term strategic planning and operation on a sustainable basis.

Structurally, the scheme is designed to be operated from the inception as a decentralised micro-financial system owned, controlled and managed by the target grassroots community.

The MASLOC will manage the scheme and the fund. In a few weeks, regional branches will be opened, eventually extending to the district level so that services are taken to the doorsteps of potential clients.

The MASLOC was established early 2004 to undertake the necessary reform and development process that would strengthen micro-finance operations as an effective and viable strategy for poverty reduction.

The other mandate of MASLOC include provision of small scale loans; co-ordination of donor micro and small credit projects/programmes; and undertaking of data and information collection, analysis and dissemination.

The objective for setting up the center is to undertake sound and judicious administration, on fiduciary basis, of Government and/or development partner funds for micro-and small-scale credit programme. In carrying out such a mandate, it may promote, educate, enhance and facilitate the operations of non-bank micro-financial institutions and targeted community and users.

The MASLOC is expected to manage the fund in collaboration with the banks on judicious business principles. President Kufuor entreated all borrowers of the fund to repay the money in order “to make the scheme successful.” He said Government expected “effective supervision and guidance” of members of micro - and small finance services providers to enable them to operate beneficiaries of the fund to operate their businesses prudently and profitably.

“By this project [fund], it is hoped that the perennial grumbling among our people of 'no money in our pockets’ in spite of the clear and remarkable improvements in the overall economy will begin to abate.”

The President indicated that the most difficult problem that continues to undermine various anti-poverty programmes was lack of accessible financial services within the reach of the masses who need these services most. Those required services include credit, savings, loans, insurance and money transfer.

To provide some of these services, Government set up a Micro-Credit Scheme in the 2001/2002 period. “From inception to date, the scheme has provided about ¢230bn to over 150,000 borrowers. Compared with an estimated number of 3.5 million people requiring such assistance, this achievement is modest,” he put it.

President Kufuor said the scheme is facing resource problems though external and local experiences confirm that micro-finance is the most viable poverty reduction strategy for supporting the poor. He added that factors like competent, resourceful, committed and well-monitored management, and the structure and coverage of the mechanism were also important.

President Kufuor recalled that the latest Human Poverty Index indicate that the level of poverty has fallen from 51.7 percent in 1998/99 to 41 percent in 2002/2003, suggesting an appreciable decline in the level of poverty within the past five years. “In reality, however, many Ghanaians still live below the poverty line.”

Assuring the citizenry that the country will succeed in over coming poverty as it is already progressively on the pathway to achieving that goal, he remarked, “We all have a challenge to work hard towards our common goal of reducing poverty in line with the aspirations of the country’s GPRS II, the Millennium Development Goals of the UN and the African Union’s NEPAD. In this task, each stakeholder has a contribution to make for the success of the scheme.”

The President commended the development partners for the various kinds of support they have given, and continue to give Ghana in its bid to ameliorate the conditions of the indigent and disadvantaged.

Hajia Alima Mahama, Minister for Women and Children Affairs, revealed that since the beginning of the operations of the micro-finance scheme, about 279,000 women have benefited from an amount of ¢17bn. Ms Mahama said under various small credit schemes, ¢7bn was given to fishmongers to help improve their income while ¢14bn worth of outboard motors was offered to fishermen.

She said the operations of these schemes have exposed many women to the banking system, adding that the overall loan recovery rate is about 60 percent. But other groups such as the Echibiase, Nungua, Osu and Madina women’s groups have 100 percent recovery rate. She observed that the micro-finance schemes have helped many women to increase their earnings and expand their business. “The benefits of the fund are enormous.”