Institutions, Corruption and Microfinance Viability in Developing Countries: the Case of Ghana and Nigeria

This article focuses on the role corrupt institutions (microfinance institutions) play in microfinance not being accessible for business development in Africa. It specifically sheds light on the contexts of Nigeria and Ghana to tease out the challenges and opportunities for small businesses consequent upon a culture of corruption in these countries and associated challenges for small business owners and entrepreneurs as well as microbusiness development. As well-known, in many developing countries with a high level of corruption, there is potentially a high incidence of institutional void, which presents setback and challenges for businesses to thrive. Microbusiness development relies largely on effective institutions to develop, and in situations where institutions are corrupt, these challenges are rather redoubled thus posing a threat to entrepreneurship development. Therefore, these contexts enable us to understand and interrogate the challenges facing microbusiness development, where corrupt microfinance institutions exist, as well as business opportunities if these corrupt institutions were not present. Thus this paper argues that for businesses to thrive enabling and effective institutional mechanisms are crucial, which will facilitate opportunities for microbusiness development.