An evaluation of the impact of Microfinance on petty traders: A case study of Kumasi Central Market

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July, 2015
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The high standard set by commercial banks in financing petty traders has created a gap in the economy that microfinance has filled. Governments and Non-Governmental Organizations have concluded that poverty among the petty traders could be solved through the concept of microfinance. But, has the era of commercializing micro financing lived up to this vision? Microfinance institutions in Ghana are seen as businesses that have profit making as their goal. What impact have they made on the petty traders in the society? A descriptive study that employed both quantitative and qualitative approaches was conducted to evaluate the impact of micro financing on petty traders in the Kumasi Metropolis. A non-random sampling method was used to select five microfinance institutions from the metropolis who have been in operation for more than five years, with identified branch managers or credit supervisors and also close to the market and 200 petty traders who are customers of these institutions and also operate at Kumasi Central Market were sampled out by the use of convenient sampling method for the study. Questionnaires were issued to petty trading customers whiles interview guides were administered to branch managers or supervisors and data gathered were analyzed through the use of simple regression and correlation. It was revealed that there was a very weak relationship between microfinance credit and savings on the one hand and petty traders’ profitability, business capital and livelihood on the other hand. The impact of Microfinance Institutions on petty traders was found to be low contrary to preview studies and literatures. In order to correct this, it has been recommended that government should partner with microfinance institutions to revise the approach of microfinance to a hybrid form that will combine profit making with subsidy.
A thesis submitted to the Department of Marketing and Corporate Strategy of the Kwame Nkrumah University of Science and Technology in partial fulfillment of the award of the degree of Master of Business Administration (Strategic Management and Consulting),