Financial performance of credit unions in Ghana: A study of six selected credit unions in the Western and Central Regions

Abstract

The general objective of this study is to evaluate the financial performance of Credit Unions in the Western and Central Regions of Ghana. This study was prompted by the inability of some credit unions to effectively analyse their financial performance. The survey design was adopted while the study covered 12 credit unions over the period 2007-2012. The analysis and discussion of the data point to three key findings. First the study revealed that the average values for the performance variables were impressive because the indicators of the credit unions for the six year period are more than a single digit. The analysis showed that there is a significant difference between the return on asset of the credit unions from the Central and Western Regions of Ghana, again there is a significant difference between the return on equity of the credit unions from the Central and Western Regions of Ghana. Finally in relation to the determinants, loan quantity, repayment, solvency and operating expense were the major determinants of the financial performance of the credit unions. It was recommended that Credit unions can diversify their operations by having similar bodies in other Regions and managers of the credit unions should engage researchers to study their operations and examine more factors that may influence their financial performance since it could improve their performance