MOTIVATION FOR ACCEPTING MICROFINANCE/CREDIT AS A STRATEGY FOR POVERTY REDUCTION AMONG THE POOR: THE CASE OF MARKET WOMEN IN THE TAMALE METROPOLIS

Abstract

The backbone of every economy is the informal sector however most employment opportunities in Ghana are largely hinged on the private sector. Hence, the contribution the sector makes to Ghana's economic development through job creation cannot be underestimated. Notwithstanding, the operators in the private sector are almost excluded from the formal financial sector in Ghana. They face difficulty in accessing credit and this therefore pose serious challenge to their growth and development. This research was carried out to assess financial accessibility and the role it plays in the businesses of market women in Tamale Metropolis in the Northern Region of Ghana. Existing literature relevant to the topic were reviewed. The objectives of the study were to determine the impact of providing small loans to credit-constrained micro-entrepreneurs in Tamale and the motivation for accepting microfinance lending by clients. The whole research covered 340 beneficiaries. The data for the study were generated from both primary and secondary sources. The research tools used to generate the data included personal interviews, Focus Group Discussion (FGD) and questionnaires. However, secondary data were extracted from books, articles, journals and presentation papers. Mixed model research approach was used to analyze the data qualitatively and quantitatively. For the quantitative, Statistical Package for Social Scientist (SPSS) was used in the analysis and drawing of tables and charts. The findings of the research revealed that financial accessibility plays an important role in poverty reduction because it improves performance, creates employment and promotes growth. It enhances income and facilitates the affordability of some basic necessities of life such as; education, health, good nutrition, clothing as well as other essential requirements of life. These have consequently improved the standard of living of many which have translated as poverty alleviation. The research also came out with some barriers to being eligible for credit. This hindrance to credit accessibility is as a result of criteria for selection, procedures and requirements, demand for unnecessary documents, and high cost of borrowing. The research therefore recommended that government and policy makers working to attain the middle income status must critically look into these with attention to financial accessibility, particularly credit for the poor.