ABSTRACT
The chapter explores the evolution of the microfinance industry and the broader financial system development within the context of policy and regulatory frameworks, generally progressive and market-led, and within the microfinance livelisystem framework (MLF) on which the dialectic method, a cycle of the thesis and anti-thesis, was embedded. The assessment covers the colonial era (up to 1957), when the financial system was characterized by limited banking services, control from Metropolitan London, the exclusion of the indigene population and the agitation for inclusion; the post-independence centrally planned economic era (1957–1983), dominated by state-sponsored financial sector development, resulting in an inefficient banking system, repressive policies and overconcentration; and the Structural Adjustment Programme (SAP) era, when reforms corrected weaknesses of a bank-dominated economy, the non-existence of money and capital markets and a weak non-bank sector. Unanticipated divergence of macro-economic and financial sector variables further led to policy initiatives including the financial sector strategic plan (FINSSP I & II) and recently the national financial inclusion and development strategy (NFIDS) aimed at promoting a balanced financial eco-system, following the 2017–2020 financial crisis. The collective successes and failures of historical antecedences and policy reforms precipitated the current state of the Ghanaian financial system, which generally underpins financial services.
