The Role Of Susu A Traditional Informal Banking System In The Development Of Micro And Small Scale Enterprises (MSEs) In Ghana

Abstract

The paper examines the role of Susu a traditional banking system in the development of Micro and Small Enterprises (MSEs) in Ghana, using some selected MSEs and Susu operators. It combines both a reflective and empirical analysis approach. It is based on extensive review of literature on the subject and draws its conclusions from analysis of field data. It attempts to underscore the significance of Susu to MSEs in Ghana. The paper sought to ascertain the role of Susu in the development of MSEs by examining the effects of Susu on MSE development. The assessment was based on analysis of total turnover on investments, and number of people employed after five years of involvement in any Susu scheme. It also reviews the strengths, weaknesses and challenges of the system and offers some suggestions for strengthening it. The results of the study indicated that Susu generally contributes to the development of MSEs. However, the Susu systems favour the development of unorganized MSEs than organized MSEs. MSEs that do not rely on heavy capital outlay are more likely to succeed with Susu than those with heavy capital outlay. The study identifies self regulation as the major set back of the Susu scheme and recommends a system of regulation that may replicate the Ghana Credit Unions Association (GCUA) system.