6.0 OVERALL FINANCIAL PERFORMANCE 6.1 Return on Assets The ratio, Return on Assets, is the measure of how well an institution uses its total assets to generate income. The ratio includes not only the revenue from the portfolio, but also all other revenues generated. Fig 11: Return on Assets Whilst the Africa and the Global MFIs had negative returns, Ghana MFIs had a positive benchmark (1.6) which was about the same for West Africa MFIs (Fig 11). The RCBs produced the best benchmark (4%) among the Ghana MFIs whilst that for the FNGOs (-2%) was the worst as the S&Ls had positive return. Among the rural banks, 4% was the best against the Ghana’s 1.5% and -6% ROA attained by the Global and Africa peers respectively. Comparatively only the Global FNGOs among the peers achieved a positive ROA (1.5%) as against the negative 2.3% and negative 6% ROA achieved by the Ghana and Africa FNGOs respectively. This means that the composition of the assets of the Ghana and for that matter the Africa FNGOs are weaker in generation of revenues. For the S&Ls category, both the Ghana and Global S&Ls achieved positive returns of 2.6% and 1.5% respectively as against the negative 6% return achieved by the Africa S&Ls. This shows that the Ghana S&Ls have a strong revenue earning assets compared with their Africa and Global peers. 6.2 Return on Equity The Return on Equity (ROE) is the measure of the level of revenue earned on the use of the equity of the MFI. . This ratio is frequently used as a proxy for commercial viability and sensitive to investor decision making. Fig 12: Return on Equity
6.0 OVERALL FINANCIAL PERFORMANCE 6.1 Return on Assets The ratio, Return on Assets, is the measure of how well an institution uses its total assets to generate income. The ratio includes not only the revenue from the portfolio, but also all other revenues generated. Fig 11: Return on Assets Whilst the Africa and the Global MFIs had negative returns, Ghana MFIs had a positive benchmark (1.6) which was about the same for West Africa MFIs (Fig 11). The RCBs produced the best benchmark (4%) among the Ghana MFIs whilst that for the FNGOs (-2%) was the worst as the S&Ls had positive return. Among the rural banks, Ghana’s 4% was the best against the 1.5% and -6% ROA attained by the Global and Africa peers respectively. Comparatively only the Global FNGOs among the peers achieved a positive ROA (1.5%) as against the negative 2.3% and negative 6% ROA achieved by the Ghana and Africa FNGOs respectively. This means that the composition of the assets of the Ghana and for that matter the Africa FNGOs are weaker in generation of revenues. For the S&Ls category, both the Ghana and Global S&Ls achieved positive returns of 2.6% and 1.5% respectively as against the negative 6% return achieved by the Africa S&Ls. This shows that the Ghana S&Ls have a strong revenue earning assets compared with their Africa and Global peers. 6.2 Return on Equity The Return on Equity (ROE) is the measure of the level of revenue earned on the use of the equity of the MFI. . This ratio is frequently used as a proxy for commercial viability and sensitive to investor decision making. Fig 12: Return on Equity