MICROFINANCE SCHEMES AND POVERTY REDUCTION AMONG WOMEN IN NORTHERN REGION OF GHANA: A CASE STUDY OF BORIMANGA RURAL BANK

Abstract

Microfinance schemes which, provide financial services such as (micro) credit, insurance and savings to the poor have become popular tools in the fight against the world poverty. The popular assumption is that enabling poor households access to credit helps households begin micro entrepreneurship thus small and medium scale business (SMB) which would enable them improve their incomes and eventually escape poverty. Evidence from research so far has been scanty, and many results have been highly contested. The main objective of the thesis was to analyze microfinance schemes on household income as well as measure household vulnerability to poverty after access to microfinance. The study used qualitative and quantitative research methods and approaches in the collection and analysing data for a fair representation of the different background and roles of respondents. The study is an experimental case of Savelugu where participants in microfinance programs and non participant households were studied over time; thus yielding a rich pooled data for analysis. On integrating time dynamics in the analysis, the results indicate a positive and significant impact of microfinance on household income. To this end, the thesis put forward that there is a role of micro finance on the improvement of household incomes. The thesis also reasserts that providing affordable financial services to the rural population still remains to be an important component of development strategy .. There is need to create a policy framework to spur growth not only in the micro enterprises but also in the overall rural economy that would lead to the creation of employment opportunities. This is quite a big task to accomplish and may require more than one particular policy intervention. In essence this calls for both private (micro finance ) and public partnerships to create the environment where such poverty reduction objectives could be realized.