Women’s economic activities and micro-finance institutions in Ghana

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All over the country, women mention lack of access to credit as the major constraint militating against their economic progress. Access to credit is one of the development problems in the country. As a result of this, the need for providing micro-finance for women cannot be overemphasized. This has led to the springing up of micro-finance institutions in the country in recent days. Since the inception of the programme, little has been done to clearly define its contribution to women’s economic progress and the problems confronting it. The operations of three institutions and their beneficiaries have been reviewed by this study. The goal of the study, therefore, is to investigate women’s access to credit and the relationship between credit delivery and business performance. The objectives outlined for the study were to identify the institutions involved in micro- finance and their credit delivery procedures, to examine micro-finance needs of women and their level of access to investment credit, to assess the extent to which implemented credit programmes have helped to improve the economic status of women, to identify the constraints to the success of the programme, and to use the necessary information to give recommendations to improve future micro-finance programmes for women.. Data for the study were collected from both the primary and secondary sources. A key informant and beneficiary questionnaires were administered to three institutions and beneficiaries respectively. The study combined both quantitative and qualitative techniques in the collection of data. Purposive and cluster sampling techniques were used on the institutions and the beneficiaries respectively. The analysis was designed to have three levels namely, descriptive analysis, financial analysis and regression analysis. Based on the empirical evidence from the institutions and beneficiaries in the study area, the three analytical tools were employed. The problems confronting both the institutions and the beneficiaries were also examined. Based on the data analysis, the following findings were outlined for the study: 1. The economic performance depended on age. 2. The institutions gave working capital to those in non-farm activities. 3. The governmental scheme had been politicized. 4. Beneficiaries’ credit needs exceeded the investment levels by I 8.4 percent, the operating cost exceeded the credit obtained by 36.6, and credit obtained exceeded credit invested in business by 18.2 percent. 5. The beneficiaries paid higher interest rate than the prevailing market rate. 6 Those who applied the training received performed better than those who did not 7. The financial profitability analysis revealed that the profit margins of bakery was highest followed by foodstuffs, then poultry, and finally, clothing and that, the profit margins depended on investment opportunities and the timing of operation. 8. The regression analysis indicated that, the performance did not depend on credit alone but some sociological factors as well. 9. The institutions complained of inadequate capital base. 10. Those who trade in perishable goods requested for storage facilities to improve upon their performance. The study recommends that 50 percent of the poverty alleviation fund should be channeled through the rural banks to the people at the district level. There is the need for public education against the politicization of governmental micro-finance scheme, and also sensitization of the public to see the need to repay the loan in order to sustain the scheme. The MFIs should introduce other credit schemes in addition to business credit, and also employ and train more project staff. The research further recommends that, credit should be associated with complementary services such as entrepreneurial skill development, assessment of clients’ capability before loans are delivered, and the MFIs should be guided by the type of business, seasonal variation as well as the demand and supply situations when dealing with beneficiaries in different economic activities. Again, there should be provision of storage facilities to clients in foodstuffs activities in addition to the business credit in order to reduce the losses incurred in their business, and also source for funding from donor agencies to expand their operation. The study concludes that though the MFIs are doing well to reduce the poverty level among the populace, there is still much that needs to be desired. The scheme stands a better chance of improving the beneficiaries’ economic status if the provision of credit is accompanied by addressing other sociological factors such as entrepreneurial skill development and assessment of clients’ capability. Also, all effort should be made to solve the problem of storage, inadequate staffing and logistics as well as the low capital base if the programme is to be improved.
A thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfilment of the requirement for the degree of Master of Science in Development Policy and Plannning, 2002