Summary
Currently, Ghana uses a form of common law modeled after that of the United Kingdom. The colonial era saw the introduction of this system, which has remained in place in Ghana ever since. During the colonial era, the English common law system was adopted in Ghana. This system has been in force since Ghana gained its independence in 1957 (Ame, 2018). Past court judgments, or “precedents,” are utilized as a basis for this method of dispute resolution. To this day, Ghana still uses the common law system rather than the pre-colonial customary law system since it is seen as more efficient and equitable.
As of 1874, when the British took control of Ghana, the common law system had been imposed upon the nation. The customary law system that existed before British colonization was seen as inefficient and unfair, whereas the common law system was considered more efficient and equitable (Ame, 2018). Additionally, the British thought that instituting common law in Ghana would be beneficial to the country’s economic growth. Common law has had a profound effect on modern Ghanaian culture. Both the legal system and the manner in which its citizens see the law in Ghana may trace their origins back to this document. Some Ghanaians have said that the common law system doesn’t accurately represent Ghanaian culture and beliefs, and this has been a source of controversy.
Socioeconomic Problem in Ghana and the Product to Address This
Many individuals in Ghana are forced to endure extreme poverty. This is a social and economic issue that requires fixing. Microloans may be used as a solution to this issue. Microloans are modest loans made to company owners in poor nations to assist them in getting their ventures off the ground or expanding their current operations. These funds might be used for everything from merchandise and advertising to salaries and benefits for new hires. It has been shown, via market research, that microloans may be an effective tool for company owners in Ghana. Screening a market to see whether it is a suitable match for a product or service is called “market research.” Microloans fill a need in the market, and there are business owners in Ghana who are both eager for and capable of repaying such loans, according to market analysis.
The provision of microloans to Ghanaian company owners, who often lack access to conventional sources of capital, has the potential to make a significant contribution to the reduction of poverty in the country. Microloans aid those living in poverty by funding company startups and expansions. Microloans in Ghana can only be effective if they are offered to business owners who can afford to pay them back. This may be accomplished in a number of ways, including by giving borrowers access to training and assistance meant to equip them with the skills and information they will need to repay their loans. In addition, it is crucial to collaborate with reliable lenders that have a history of successfully financing Ghanaian business owners.
Likeliness for an Entrepreneur to Enter the Market
There is much room for new businesses to flourish within Ghana’s present legal framework. The government of Ghana is typically business-friendly, and the country’s legal system affords investors considerable safeguards. Nonetheless, there is still room for development, including the speed of the legal system and the degree of corruption. Several factors contribute to Ghana’s favorable business climate. To begin, Ghana’s legal system has matured to the point where it offers robust safeguards for investors. Contract law, property law, and bankruptcy law all fall under this category. Two, there are several government programs and policies that encourage company development and investment. Finally, while the legal system’s timeliness and the amount of corruption may be better, Ghana is generally a decent environment to conduct business.
The decision to set up a shop in Ghana might be motivated by a few main factors. The country’s market is huge and expanding for a number of reasons. It has a youthful population and a rapidly expanding middle class. Second, there is a favorable political and economic climate for firms to thrive in Ghana. Third, Ghana is a desirable place for company owners to set up shop due to the country’s business-friendly climate, which includes a sophisticated legal framework and supporting government policies.
International Market Entry Methods
Local Partner
The primary benefit of this strategy is that it requires little to no financial or personal risk. This is due to the local partner’s connections and networks inside the Ghanaian market, which may pave the way for the micro-lender’s introduction. A local partner in Ghana may also be able to supply useful information about the local market. The primary problem with this strategy is that it might give the micro-lender less authority over its activities in Ghana (Gakpo et al., 2021). This is due to the fact that the local partner will likely have a substantial investment in the joint venture, necessitating shared decision-making. It is also possible that the micro-lender won’t be able to take advantage of economies of scale to the same extent that a standalone business might.
Direct Investment
One major perk of this approach is that the micro-lender will have complete control over how the money is used in Ghana. This implies their business model may be implemented with less hassle and greater potential for economies of scale to be realized. Further, the Ghanaian clientele may be more interested in this approach since they would see the microlender as more devoted to the local market. Greater financial and operational risk is the primary drawback of this strategy (Kujala & Törnroos, 2018). This is because it might be time-consuming and costly for the microloan provider to initiate brand-new connections and infrastructure in Ghana. The micro-lender could also lack the in-depth familiarity with the market that a local collaborator would.
Effective and Ineffective Advertising
It would be wise to market to small firms and entrepreneurs in Ghana that are looking to expand their operations but are struggling to do it on their own. Microloans may be a lifeline for people in these situations, and by advertising to them specifically, one can increase the likelihood of reaching those who would benefit most from your service (Gakpo et al., 2021). One can reach the people in Ghana who will be most interested in and in need of their goods if they focus on small enterprises and entrepreneurs. More clients taking out microloans is a possible outcome, which in turn might help more firms to succeed.
Advertising that aims for a broad audience without narrowing down on the people who are really in need of and interested in the product is a waste of time and money. Potential buyers could be put off by this, and the company might lose much money and resources as a consequence. It is possible to spend much money and time attempting to appeal to everyone instead of just the people who are most likely to buy the goods. Furthermore, if prospective buyers believe they are constantly being inundated with adverts that are not relevant to them, they may decide to go elsewhere.
Legal Compliance Approaches
Businesses must make sure that their microloans adhere to Ghanaian banking laws. The Bank of Ghana (BoG), the nation’s central bank, oversees the banking industry in Ghana. Businesses that offer microloans must adhere to the BoG’s rules on financial services (Kujala & Törnroos, 2018). These rules address a variety of banking-related topics, including bank licensing, prudential standards, and consumer protection. Businesses should make sure that the regulations governing consumer protection in Ghana are followed while making microloans. The Consumer Protection Act is one of many consumer protection legislation in Ghana (CPA) (Kujala & Törnroos, 2018). The CPA establishes consumer rights and outlines firms’ obligations. Businesses must tell customers accurately and honestly, and they cannot use unfair or misleading tactics.
Recommendations to Consider
In Ghana, it is crucial to take the loan beneficiaries’ morals and sense of duty into account while making microloans. For instance, some loan receivers could spend the cash on hazardous or unlawful activities (Gakpo et al., 2021). It is crucial for the lender to make sure the loan is used for what it was intended for and does not hurt other people. In Ghana, it is also critical to take the competition into account while offering microloans. In Ghana, there are several different institutions and people that provide micro-loans, therefore, it is critical to be informed of their operations. To compete with other lenders, it is also crucial to make sure the loan’s terms are reasonable and fair.
References
Ame, R. K. (2018). The origins of the contemporary juvenile justice system in Ghana. Journal of Family History, 43(4), 394-408. Web.
Gakpo, M. D. Y., Wujangi, M., Kwakye, M., & Asante, V. G. (2021). The impact of microfinancing on poverty alleviation and small businesses in Ghana. The International Journal of Social Sciences and Humanity Studies, 13(1), 1-28.
Kujala, I., & Törnroos, J. Å. (2018). Internationalizing through networks from emerging to developed markets with a case study from Ghana to the USA. Industrial Marketing Management, 69, 98-109. Web.