The impact assessment of microfinance in Kumasi Metropolis (a case study of Garden City Savings & Loans Limited)

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The number one goal of MDG is to eradicate extreme poverty and hunger by the year 2015. Extreme poverty is defined as “living on less than US$1.00 per day” (Annette, 2005). In his submission, Annette argued that “We need poverty measuring tools so that any agency can measure clients’ poverty level before they enter into microfinance and then monitor their progress toward leaving extreme poverty” (2005). The researcher has accepted this challenge by taking the initiative to measure the positive impact microfinance has made on the businesses of sole-proprietors and their personal lives using GCASLL as a case within Kumasi Metropolis. Dubboi (2006), defined microfinance as “The provision of a broad range of financial services such as deposits, loans, payment services, money transfers and insurance to poor and low- income households and their businesses”. Throughout the research, it was revealed that microfinance has provided significant financial assistance to sole-proprietorship through special “susu” and “golden susu” deposits. The Minimum daily “susu” contribution for Special “Susu” operators is ten Ghana cedis, while that of Golden “Susu” operators is not set at any specific amount, however, contributors set it at twenty Ghana cedis. Three times the amount contributed for six months without default is given as a loan to client at a rate higher than commercial bank prevailing rate. Sole-proprietors have been able to raise loans to increase their stocks within the range of GH¢ 10,000. 00 and GH¢48, 000.00 I was really amazed when I discovered that clients, apart from their daily “susu” contribution, also have savings accounts and their daily savings ranged between GH¢ 10.00 and GH¢40.00. With these contributions and savings habits, clients were able to run successful businesses without any basic financial difficulties. Sole-proprietors have plans to expand their businesses and do more investments. They could now afford to send their children to Private Schools at the Primary level and had not much difficulty in financing those in tertiary institutions. The social lives in respect of acquiring personal belongings and funeral attendance in required dresses has also improved significantly. The only negative development access to finance through microfinance has brought to their lives s attention to religious matters. Attendance to church gathering, morning and evening meetings have reduced significantly. This is a good sign in the business domain since running a business entity requires more time, and failure to adhere to this simple principle is doomed to fail. Nonetheless, access to microfinance has brought a fortune to religious domain in the form of increase in donations or contributions made by the beneficiaries towards religious matters. Based upon these assessments and many other findings detailed in the chapters of this paper, it can be concluded that microfinance has brought some amount of joy and relieve in the businesses and personal lives of its clients.
A Thesis submitted to the Department of Social Science, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Business Administration, 2008