Assessing the Socioeconomic Impact of Microcredit: a Case Study Of Sen’s Program

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Bold aspirations about the benefits of microcredit raise the question of its actual impact. Expectations are high, but evidence of the impact of microcredit remains scant and mixed. There are methodological problems of selection bias, inaccurate recall and response bias within affordable cost and frame. This study assessed the socioeconomic impact of a microeconomic programme in the Offinso Municipality, of Ghana. Clients were compared with pipeline borrowers in a “with/without” study. Conditions “before/after” comparison helped address potential selection bias. Quantitative data were complemented with qualitative enquiry. Clients (borrowers) experienced greater enterprise growth and wellbeing than pipeline borrowers Clients’ enterprises indicated better performance on several indicators” after” than “before” receiving credit – for example, higher revenue growth greater household income and increase in paid employment. In addition, greater percentage (61%) of programme participations reported feeling more secure financial; and 59% of participants felt better of as against 48% of pipeline borrowers. Eighty percent of programme participants reported having access to healthcare. The national average of access to healthcare was 66% and the Ashanti regional average was 50%. Overall the socioeconomic impact of the programme was found to be hugely positive on the individual, the household, the enterprise and the community.
A thesis submitted to the School of Business Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the Degree of Master of Business Administration, 2008