Re-evaluating MASLOC, prioritising proposed Women's Development Bank

The establishment of Microfinance and Small Loans Centre (MASLOC) with the aim of providing accessible microcredit and small loans to start-ups and small businesses was a commendable initiative. 

However, over the years, the institution has faced numerous challenges, raising concerns about its effectiveness and sustainability.

Reports of alleged misappropriation of funds for personal, political, and business interests, coupled with allegations of unqualified individuals being appointed to managerial positions, have dominated the media space over these past couple of years that the institution has been in existence.  

The high rate of unpaid loans, amounting to GH¢291.5 million over the past 12 years, as disclosed during the Public Accounts Committee hearings in February 2024 suggests a lack of robust business strategy and risk assessment protocols.

The amount was said to have been part of the GH¢304,345,925 advanced to the beneficiary businesses from 2008 to 2020 which officials have subsequently described as becoming a legacy debt.  

Politically aligned disbursement

Similarly, allegations of funds being disproportionately allocated to politically aligned individuals, rather than hardworking entrepreneurs striving to build viable businesses and create employment opportunities, should be deeply troubling.

While MASLOC's original intent was positive, its operational challenges and perceived politicisation have undermined its ability to achieve its core mission, necessitating a critical re-evaluation of its current structure and function.

Prior to assuming office on January 7, 2025, the new government had announced its intention to establish a Women's Development Bank if it won the 2024 general election, a campaign promise which perhaps generated some considerable public interest and anticipation, not only among women, but also the general public.

In the spirit of this promise, a strategic realignment of MASLOC and the yet-to-be-established Women's Bank is key, rather than attempting to reform MASLOC which risks simply reinventing the same problems.

By focusing resources and efforts on establishing the promised Women's Development Bank, the new institution could be designed with a more focused mandate.

This mandate should target women entrepreneurs and young people with start-up and business development funding.

This presents an opportunity to learn from the challenges faced by MASLOC and implement best practices from the outset.

The Women's Development Bank should be made to prioritise transparent and objective loan disbursement processes, including establishing clear loan eligibility criteria, forming independent review boards and implementing robust due diligence procedures to minimise political influence and ensure funds reach deserving entrepreneurs.

Similarly, a strong corporate governance should be in place ensuring a robust governance framework with clear lines of accountability, independent oversight, and regular audits to prevent mismanagement and corruption.

The bank should not only provide funds but also offer training, mentorship, and business advisory services to equip recipients with the skills and knowledge necessary to succeed.

This holistic approach can significantly increase the likelihood of loan repayment and business growth, especially when clear metrics are defined to measure the bank's impact on women's entrepreneurship, job creation, and economic development within communities.

This data-driven approach will help assess the bank's effectiveness and inform future strategies, especially as it expands across the country, an expansion that will contribute to a lasting legacy of empowering women and young people, fostering entrepreneurship, and driving economic growth.

The ultimate goal is to create a truly impactful institution that serves the needs of Ghanaians.