The impact of Microfinance Institutions on Poverty reduction among entrepreneurs in Ghana. A case study in the Ga South Municipal Assembly

Abstract

Poverty in the developing world like Ghana is an overwhelming challenge for its government to deal with alone. Part of the responsibility then shifts to the private sector to assist in curbing the alarming rise of poverty. This study was set up to investigate whether private commercial microfinance institutions are really contributing to poverty alleviation in the Ga South municipality of the Greater Accra region of Ghana. The secondary data were gathered from the Ghana Microfinance Institutions Network, Ghana Statistical Service while pirmary or empirical evidence was gathered from a set of group loan clients under the Opportunity International group structure through a qualitative research methodology. A review was carried out on theories such as group lending, individual lending, credit union, village banking and the concept of women empowerment amongst others. The research was based on four objectives and three research questions. The empirical evidence retrieved after the data collection where the main data used in the discussion and conclusion of this research. Results, discussions and conclusions were based on the three research questions. The implication of this research is that asset building and poverty eradication does not happen only by the provision of loans to clients but with prudent management of the resources loan clients are given them. The research concludes that there is a link between the provision of loans by MFI’s and the minimization of economic poverty within the study area. Additionally, internal and external forces were established as the two forces that contribute to default. Lastly, loan clients needed more training and monitoring before, during and after loans are disbursed to them this is necessary to ensure that the loans given to them are properly accounted for and utilized for the purpose for which they were given.