Determining the Effect of Microfinance on Small Scale Enterprises: The Case of Hohoe Municipality of Ghana

Abstract

The fundamental objective of this study is to assess the impact of Microfinance on Small Scale Enterprises (SSEs) in Hohoe. Simple Random Sampling technique was employed in selecting the 80 SSEs that constituted the sample size for the study. Structured questionnaire was designed to facilitate the acquisition of relevant data which was used for analysis. Descriptive statistics which involves simple percentages, graphical charts and illustrations were applied in data presentations and analysis. The findings of this study reveal that significant number of the SSEs benefitted from the MFIs loans even though only few of them were capable to secure the required amount needed. Interestingly, majority of the SSEs acknowledge positive contributions of MFIs loans towards promoting their market share. The study recommends that management of microfinance institutions should incorporate SSE’s views or inputs into the formulation or review of their credit management policies. The microfinance institutions may consider embarking on monitoring the SSEs to ensure that the loans are being used for its intended purpose.

Keywords: Microfinance, SSEs, Hohoe, credit lending, financial growth