Microfinance and Poverty Reduction Nexus among Rural Women in Selected Districts in the Upper West Region of Ghana

Abstract

It is argued that access to such credit enhances the consumption levels of poor households, increases their income levels, empowers and helps them build assets to reduce their vulnerability to poverty and poverty itself. This study uses changes in asset score as a proxy of well-being. To do this, data on basic assets owned by women in the selected districts were gathered from a sample of 200 women using questionnaires.  A logit model was estimated with change in asset score as the dependent variable and access to microfinance and some characteristics of women, and that of their household’s heads as the explanatory variables. The results of this test were complemented with predicted probability scores for a positive change in access score. The results indicate that access to microfinance can help women acquire and accumulate assets thereby enabling them improve their well-being. The study also identified is a positive relationship between asset acquisition and educational level, on one hand, and between asset acquisition and marital status on the other hand. Unfortunately, a negative relationship was established between assets acquisition and the number of dependents in a household. The study thus concludes that women should be encouraged to involve themselves in microfinance to enable them become financial independent and contribute positively towards their families and communities as well.

Keyword: Microfinance, Poverty Reduction, rural Women, women empowerment