Dr Sam Ankrah: It’s Time to Treat African Microfinance as a Serious Business, Not Charity

Economist Dr Sam Ankrah has issued a bold call to action: African microfinance must be repositioned as a competitive institutional asset class, not a charity project. Speaking at the International Microfinance Investors’ Summit 2026 in Accra on August 6, he laid out a clear, data-driven roadmap for reform that could unlock billions in investment and transform the continent’s financial landscape.

The two-day summit, organized by the Financial Inclusion Advocacy Centre (FIAC) and partners, drew senior executives from central banks, ARB Apex Bank, GHAMFIN, CUA, and delegations from Nigeria, Sierra Leone, Liberia, and The Gambia. The theme was clear: “Repositioning Microfinance for Investment, Growth and Stability.”

Why This Matters for Ghana and Africa

Dr Ankrah opened with a powerful reminder that this is not just a Ghanaian conversation. “We are not having a Ghanaian conversation this morning,” he said. “The same conversation took place in Lagos three days ago. It is taking place in Dakar and Abidjan, in Nairobi and Kigali... Accra is simply where the continent has chosen to hold it this week.”

He framed his core argument in one line: “Governance, plus competency, plus effective regulation and supervision, equals a resilient and robust microfinance ecosystem.” Capital, he stressed, is not a fourth input but “the output — what arrives when the other three are present.”

The Data That Demands Action

The numbers are staggering. The International Labour Organization estimates that about 86 percent of employment in Sub-Saharan Africa is informal, rising above 90 percent in Central and West Africa. The IFC puts the small-business financing gap in the region at $331 billion — roughly the entire annual output of South Africa.

Yet global microfinance-focused funds hold about $23 billion. Africa-focused impact funds hold $18.6 billion, but only $692 million — just 4 percent — is allocated to microfinance. African funds also hold higher loan-loss reserves and more cash because they cannot deploy it.

Governance: The Root Cause of Failure

Dr Ankrah pointed to governance failures as the main cause of institutional collapse. In the West African Monetary Union, 533 institutions serve 19 million clients, yet portfolio-at-risk stood at 8.9 percent at end-2024 against a 3 percent ceiling, with nine institutions under administration. Nigeria revoked 225 microfinance bank licences in two waves, while Ghana revoked 347 in one day in 2019. Kenya’s microfinance banks have posted losses for nine straight years.

“None of those institutions failed because the minimum capital was too low,” he said. “They failed because nobody with authority was willing or able to say no to the man who owned the building.” He described Ghana’s new ownership caps as “the most direct available attack on the precise mechanism that has destroyed institutions across this continent.”

Competency and Regulation: The Missing Links

On competency, Dr Ankrah warned that capital can be raised in 90 days but capability cannot. He questioned whether boards, risk functions, and management information systems improve alongside balance sheets, noting many institutions still cannot produce audited accounts, portfolio ageing reports, and board minutes on demand.

He made a parallel call to regulators. “Regulation is writing the rule. Supervision is knowing, continuously, whether the rule is being followed,” he said, citing Kenya where digital lenders grew from 32 to 85 while supervised MFB assets fell to a decade low. He urged supervisors to match capacity with ambition and to move from “compliance-heavy policing” to genuine risk-based supervision.

Technology: A Double-Edged Sword

Technology, he said, is changing the economics of delivery. Africa processed about $1.1 trillion through mobile money in 2024 — roughly two-thirds of the global total. Account ownership in Sub-Saharan Africa rose from 34 percent in 2014 to 58 percent in 2024, creating a data footprint that can support new underwriting.

But he cautioned that digitization accelerates what already exists. “A badly governed institution that digitises simply makes bad loans faster,” he noted, referencing Kenya’s digital credit boom and Rwanda’s shift from cooperatives to mobile wallets.

Funding: The $18.6 Billion Opportunity

Dr Ankrah presented stark figures on funding. The solution, he argued, is not a lack of money but a shortage of investable institutions and legible risk. Blended finance remains underused: across 300+ transactions, each dollar of concessional capital mobilized $4.10 in commercial capital. He also flagged currency mismatch as a killer and pointed to existing tools like TCX, which has hedged over $17 billion, and the African Guarantee Fund.

For institutions facing recapitalization, he listed options: rights issues, strategic equity, diaspora capital, subordinated and mezzanine debt, convertibles, and holding-company structures. He noted recent Kenyan deals where fintechs took majority stakes in MFBs, and urged associations to build pooled regional vehicles to make tickets fundable.

What Investors Really Want

Speaking from the investor’s perspective, he listed why deals are rejected: late or unsigned accounts, shifting PAR numbers, boards dominated by family, undisclosed related-party lending, and pitches focused only on market size. “Not one is a capital failure,” he said. “Every one is a governance or competency failure.”

Five Steps to a Brighter Future

Dr Ankrah closed with direct requests. To regulators: publish data, sequence reforms, and resource supervision. To institutions: declare pathways honestly, including mergers, and fix governance before chasing capital. To investors and DFIs: bring blended structures and technical assistance. To associations: build training and pooled facilities at sector scale.

“From Dakar to Nairobi, from Addis to Accra, the pattern is identical,” he concluded. “Capital follows governance. Supervision must match ambition. And digitisation without risk management simply accelerates the losses.”

The summit is expected to produce a roadmap for consolidating microfinance institutions, strengthening supervision, and channeling blended finance into the sector in line with the theme of investment, growth and stability.

FAQ: Understanding the Microfinance Revolution

What is the main problem with African microfinance today?

Governance failures, not lack of capital, are the primary cause of institutional collapse. Many institutions lack competent boards, risk management, and transparent reporting.

How can Ghana’s diaspora help?

Diaspora capital is one of several options for recapitalization, along with strategic equity, subordinated debt, and holding-company structures. Pooled regional vehicles can make investments more attractive.

What role does technology play?

Technology lowers delivery costs and creates data for underwriting, but it only works if governance is already strong. Bad governance plus digitization equals faster losses.

What is the biggest opportunity?

Blended finance can unlock commercial capital. Each dollar of concessional capital mobilized $4.10 in commercial capital across 300+ transactions. The $18.6 billion in Africa-focused impact funds is largely untapped.