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RFSP - Ghana: The most important results were of institutional nature

The most important results of the Rural Financial Services Project in Ghana were of institutional nature. The project helped strengthen the regulatory and oversight bodies (Bank of Ghana, Ministry of Finance and Economic Planning) as well as the capacity of apex bodies for rural banks and credit unions. It also contributed to the professionalization of rural banks. At the micro level, however, access to lending products did not increase according to expectations, particularly for small-scale farmers.

Key recommendations of this project performance assessment pertain to the introduction of innovative approaches and products that can help deepen the outreach of lending to poorer clients and small farmers, such as matching grants and guarantee schemes. Innovative products need to be introduced in a more systematic manner, with pre-feasibility studies and pilot tests to ensure better adaptation to the context and risk management. Also, synergies need to be strengthened with other IFAD-financed projects supporting rural development in Ghana.


RFSP’s value added mainly consisted of its accomplishments in institutional development and its contribution to greater outreach of rural banks and credit unions. This outreach is mainly related to savings product and credit for non-agricultural activities. The progress made in boosting credit to agricultural activities and value chains was more modest. RFSP made progress in policy dialogue, particularly with the approval of the Ghana Microfinance Policy of 2006. The above important achievements for the rural and microfinance sector as a whole are broadly beneficial to low-income and poor households in the country. In line with IFAD’s mandate, the project’s main weakness was its limited focus on micro-level interventions that cater for the specific needs of the poor, such as the envisaged linkages between informal and formal financial institutions. Also, there were limited synergies between RFSP and other IFAD-supported projects in Ghana.


This PPA formulates the following recommendations that may be adopted by the RFSP successor programme (RAFIP).

- Recommendation 1. Provide support to innovations (processes and financial products) in a more systematic manner, with pre-feasibility studies and pilot tests to ensure that key stakeholders contribute to design and better manage risks.
- Recommendation 2. Support credit for agriculture and agricultural value chains by introducing and progressively expanding innovative financing instruments such as matching grants and guarantee schemes, as well as by ensuring more synergies between IFAD-supported projects in rural and agricultural development and RAFIP (RFSP successor intervention).
- Recommendation 3. Continue to support policy dialogue in rural and microfinance, enhance coordination among donors and support apex organizations so that the latter can take a more active role in the appropriate sectoral fora.
- Recommendation 4. Strengthen monitoring and evaluation systems by investing in further informatization of the sector and introducing internationally recognized indicators in the self-monitoring system of micro and rural finance institutions; more systematically assess the usefulness of training packages; conduct a baseline and follow-up survey on the socio economic impact of country-wide rural and microfinance programmes such as RAFIP

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13 March 2012

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