The purpose of the study was to determine the impact of micro finance in reducing poverty in the Wa East District of the Upper West Region of Ghana. The hypothesis of the study was "micro loans when used on income generating activities will lead to poverty reduction."
The spreadsheet programme was used to do the analysis on reducing poverty through micro financing in the Wa East District of the Upper West Region of Ghana. The theoretical frame work was based on the Foster-Greer-Thorberke Class Index. The researcher also used "costs of basic needs" method to calculate head count poverty in order to compare consumption expenditure of MASLOC and Non MASLOC families. The study had a Crounbach reliability Coefficient of .95 after pilot test.
Data were collected from MASLOC records as age, sex, business and household expenditure. The researcher also collected data from some 50 MASLOC applicants who received loans and 50 others who did not receive the loans in order to triangulate the data on household expenditure, number of individuals in household including other bio-data. It was found that poverty reduced slightly for MASLOC families than for Non MASLOC families. The researcher recommends that government, development partners and Non-governmental organizations must collaborate to increase micro loans to the people of Wa East District in Upper West Region of Ghana in particular and the productive poor in general.
Table of Contents
1. INTRODUCTION
2. OBJECTIVES OF THE STUDY
3. SUMMARY OF LITERATURE REVIEW
4. OVERALL OUTCOMES STRATEGY AND TECHNIQUES OR RESULTS
5. CONCLUSION
5.1 RECOMMENDATIONS
5.2 SUGGESTION FOR FURTHER RESEARCH
Research Objectives and Core Themes
This study aims to evaluate the effectiveness of micro-credit schemes provided by MASLOC in reducing poverty within the Wa East District of Ghana. By comparing household consumption expenditure and poverty levels between loan recipients and non-recipients, the research seeks to determine whether micro-financing serves as a viable tool for economic upliftment and poverty alleviation for the productive poor.
- Impact of microfinance on poverty reduction in rural Ghana.
- Comparative analysis of MASLOC vs. Non-MASLOC families.
- Utilization of the Foster-Greer-Thorberke Class Index for poverty measurement.
- Evaluation of credit constraints for micro-enterprises and women.
- The role of micro-credit in stimulating income-generating activities.
Excerpt from the Book
1. INTRODUCTION
Todaro (2009,P1) explained that microfinance is the supply of credit, savings, vehicles, and other basic financial services made available to the poor and vulnerable people who might otherwise have no access to them or could borrow only on highly unfavorable terms. Todaro indicated that, microfinance institutions specialize in delivering these services in various ways and according to their own institutional rules. He cited the case of village banking, or group lending schemes as an example of microfinance institution. Village banking refers to situation where a group of potential borrowers forms an association to borrow funds from a commercial bank, a government development bank, an NGO or a private institution. Todaro added that the association borrows the funds and then lends the funds to individual members, whose responsibility is to repay the group or association. But it is the responsibility of the group to repay the loan to the lending institution.
According to Todaro (2009), economic research has consistently found that unavailability of credit is a major hindrance to microenterprise development. Todaro further explained that majority of micro enterprises are operated by women and so the constraint of credit unavailability affects, though not exclusively, women borrowers. He assigned the following reasons for the foregoing constraint; lack of property rights of women, local cultural practices and more importantly, lack of collateral security. What all that means is that the significance of microfinance in reducing poverty cannot be over emphasized.
Todaro also pointed out that some three related factors make it difficult to relax the credit constraints to poor women and micro enterprises in general. These are; little or no collateral, difficulty of conventional lenders determining quality borrowers and the fact that small loans are more costly to process per dollar cent.
Summary of Chapters
1. INTRODUCTION: Provides a foundational overview of microfinance, explaining its role in credit supply and its significance as a tool to overcome barriers like lack of collateral for the poor.
2. OBJECTIVES OF THE STUDY: Defines the research intent to assess the efficacy of MASLOC credit schemes in the Wa East District and measure poverty levels among residents.
3. SUMMARY OF LITERATURE REVIEW: Examines scholarly opinions and previous studies on micro-credit's impact, highlighting the varying results on poverty alleviation and the importance of investing in women's work.
4. OVERALL OUTCOMES STRATEGY AND TECHNIQUES OR RESULTS: Details the quantitative analysis methodology using the Foster-Greer-Thorberke Class Index and presents findings from MASLOC and Non-MASLOC household data.
5. CONCLUSION: Synthesizes the study's findings, confirming a slight poverty reduction in MASLOC families, and proposes future actions based on these results.
5.1 RECOMMENDATIONS: Urges increased collaborative support from the government, NGOs, and stakeholders to provide more credit to the productive poor.
5.2 SUGGESTION FOR FURTHER RESEARCH: Discusses the need for deeper investigation into the variations of poverty levels observed between different income-earning groups.
Keywords
Microfinance, Micro-credit, Poverty Reduction, Wa East District, MASLOC, Economic Growth, Household Expenditure, Income-Generating Activities, Women Empowerment, Foster-Greer-Thorberke Class Index, Credit Constraints, Rural Development, Collateral, Informal Sector, Economic Self-sufficiency.
Frequently Asked Questions
What is the core focus of this research?
The work focuses on determining the impact of micro-credit provided by MASLOC on reducing poverty levels in the Wa East District of Ghana.
What are the central themes of this document?
The central themes include the accessibility of financial services for the poor, the role of micro-credit in fostering small businesses, and the comparative economic status of loan recipients versus non-recipients.
What is the primary research goal?
The primary goal is to evaluate if micro-loans, when utilized for income-generating activities, effectively contribute to poverty reduction in a specific rural context.
Which methodology is employed in this study?
The researcher uses the "costs of basic needs" method and the "Foster-Greer-Thorberke Class Index" to analyze and compare consumption expenditure between MASLOC and Non-MASLOC families.
What topics are covered in the main section?
The main sections cover literature reviews on microfinance impact, data collection on household bio-data, statistical analysis of poverty incidence, and final policy recommendations.
Which keywords best characterize this work?
The study is best characterized by terms such as Microfinance, Poverty Reduction, MASLOC, Wa East District, and Economic Growth.
How does the researcher measure poverty?
Poverty is measured using the head count method and the Foster-Greer-Thorberke Class Index, specifically looking at consumption expenditure per adult equivalent.
What does the study conclude regarding MASLOC families?
The study concludes that poverty reduced slightly for MASLOC families compared to those who did not receive loans, confirming the positive impact of the scheme.
Why are women specifically highlighted in the research?
Women are highlighted because they constitute the majority of micro-enterprise operators and often face unique credit constraints like lack of property rights and collateral.
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- Dr. Munawaru Issahaque (Autor:in), 2013, Reducing Poverty Through Microfinancing in the WA East District of the Upper West Region of Ghana, München, GRIN Verlag, https://www.grin.com/document/461298
