Sectoral Analysis Of Credit Mobilization In Ghana

Abstract

Credit developments in Ghana, have been examined, with the focus on credit mobilization (savings), sectoral allocation, and cost between 1993 to 2004. The methodology adopted for the study-involved computation of averages, ratios, percentages and elasticity of demand. The study revealed that mobilization of credit was inadequate and insufficient, principally, because the savings or deposit interest rates were very low. The wide range of interest rates prevailing also depicted a very low financial intermediation and high cost of credit in Ghana. Even though the agricultural and manufacturing sectors were considered crucial to the economy, the percentages of domestic credit allocated to the sectors were inadequate. Therefore, a policy on realistic interest rate structure required enhancing credit mobilization and allocations for enterprise growth and development of Ghana is recommended.

Journal of Business Research Vol. 1 (1&2) 2007: pp. 41-48