Takoradi: Mr Kwabena Okyere Darko-Mensah, the Member of Parliament for Takoradi, has called on micro-credit institutions to transform into engines of sustainable and equitable progress by adopting environmental and social governance principles. This approach, he emphasized, would enable these institutions to thrive while creating lasting societal impacts.
According to Ghana News Agency, Mr Darko-Mensah made these remarks during a dinner and Awards Night at the 16th Annual General Meeting of the Microcredit Association of Ghana, held in Takoradi. He highlighted the pivotal role micro-credit has played as a lifeline for millions, empowering entrepreneurs and communities that are often excluded from traditional banking systems. However, he pointed out that in today's world, which faces challenges such as climate crises, social inequalities, and governance issues, focusing solely on financial returns is insufficient.
Mr Darko-Mensah identified several challenges confronting Ghana's micro-credit institutions, including high default rates, limited digital infrastructure, regulatory concerns from the Bank of Ghana, and issues of public trust stemming from past micro-finance collapses, particularly during the 2017-2019 financial sector clean-up. He stressed that for these institutions to thrive, they must integrate Environmental, Social, and Governance (ESG) principles into their core missions, ensuring they not only survive but also drive sustainable and equitable progress.
He further explained that ESG matters because micro-credit institutions often operate in vulnerable regions, serving people who face significant barriers. By adopting ESG regimes, these institutions could enhance their impact while securing their future. The essence of micro-credit, Mr Darko-Mensah noted, lies in empowering underserved groups such as women, youth, and marginalized communities, and therefore, should extend beyond lending to ensure fairness and protection.
Mr Darko-Mensah concluded by advocating for a shift beyond profit-making to create a legacy of impact, resilience, and hope, positioning micro-credit as a beacon of sustainable progress for future generations.
