Assessing the Impact of Microfinance on Rural Communities: a Case Study of Tetram Kyekyewere and Boaman Communities in Offinso Branch of Sinapi Aba Trust

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It is recognized that provision of financial services to the micro enterprise helps with the minimization of poverty. Large proportion of poverty among rural people has been due to certain cultural practices which have been one of the main barriers to development in developing countries. It is a problem that developing countries governments cannot solve alone because of its financial implications. This as a matter of fact has necessitated the private sector or non governmental organizations to intervene in solving this problem. One of the means found to be effective is the use of microfinance and it is believed that with microfinance people in poor communities can achieve some level of decency in their lives. An attempt has been made to identify some clients of Sinapi Aba Trust in three communities in Offinso Branch to assess the impact of SAT credit on their businesses and families and recommend strategies to enhance the operational deficiency in SAT. This has been achieved through administration of questionnaire and interviews of Ninety Four clients of the three communities at Offinso Branch of the Trust. The study aims at finding out whether there is a possible causal relationship between elements of SAT and the clients they deal with. SAT is chosen because it is a non governmental organization in Ghana that deals in microfinance in all the ten regions of Ghana. The Offinso branch is also selected because it has clients who are four years and above.Focus group discussions and an interview with clients were arried out. First of all, a brief introduction to the study is given; the general concept about microfinance is narrated.In the findings and analysis it was realized that access to microfinance has effect on the individual, household/family, community and enterprise levels of clients. In that some were able to increase their savings level, diversify their business, and improve upon the living standards of their household. The study further identified that marketing has emerged as an important managerial tool and there is the need for SAT to beef up it marketing department so that they could research in what clients really want so that we do not impose on them. Finally, the study identified immense growth-related opportunities for the SAT and if these recommendations are implemented will go a long way to enhance the operations of SAT to enable micro entrepreneurs access financial resources and create wealth among themselves. Notwithstanding these, the clients complained about the group loans which seem to be the main product that the branch gives to them. It was therefore concluded that effort should be made to give the client more individual loans and faction out specific products that will meet/address the specific needs of these clients such as school fees loan.
A thesis submitted to the College of Arts and Social Sciences, KNUST School of Business, 2008