The relative impact of Microfinance organisations on the well-being of the ordinary Ghanaian - a study of the Offinso Municipality

Abstract

Micro-finance has received a lot of attention, both from policy-makers as well as in academic circles. Microfinance Programmes have been introduced in many developing economies to primarily alleviate poverty through providing financial services to the poor. This study was therefore to assess how these proliferating institutions are affecting their clients, which is the objective of this research. What are some of the motivations for people to go for loans and what are their effects on livelihood and assets ownership? The study adopted survey of clients based in the Offinso Municipality in Ghana and the data was collected through questionnaire administration. It sampled the opinions of clients who received loans on the extent to which MFIs have been able to positively changed their livelihood, confidence in life and asset holding capacity or vice versa.

The results from the analysis reveal that almost 97% of clients confirmed little or much better livelihood. A chi square test proved that this was not by chance and the improvements in livelihood emanated from the credit facility. The main factor that entices clients to solicit credit facility is closeness and familiarity of the service. This factor was found to have a Relative Importance Index (RII) of 0.819, (approximately 82%) of the ranked factors that cause clients of MFIs to go for loans and the effects were that over 90% of clients had gained self-confidence and have also acquired personal assets as a result of the patronage of MFI loan services. The results from the analysis also reveal that 88% of clients were females whose level of education did not exceed Middle School leaving certificate or Junior High School.

Key words: Microfinance, Indices, Livelihood, Poverty, Collateral, Microcredit, Loans, Asset, Ownership