Role of microfinance in poverty reduction in the Ashaiman Municipality, Ghana
The worldwide globule in poverty is not spatially evenly distributed, particularly, in the Ashaiman Municipality of Ghana. With the advent of microfinance, it was perceived as a magic bullet to poverty reduction; yet, studies on its impact on poverty have been inconclusive motivating the assessment of microfinance’s role on poverty reduction. The after only study strategy of enquiry guided the study while the sample was 265 from which data were collected using a questionnaire as well as interview and observation guides. Descriptive statistics, parametric and non-parametric methods were applied to the quantitative data whereas thematic analysis was employed in analysing the qualitative data. It surfaced that sex, duration on microfinance and business advisory service predicted about 12 percent of the variation in income of beneficiaries. Fundamentally, income, savings, and food consumption after benefiting from microfinance services were grand when equated to the situation before benefiting from microfinance. Overall, microfinance contributed to poverty reduction. Consequently, the recommendation is that the timely and regular provision of business advisory services to clients will ensure they invest the loans prudently to yield the right returns to facilitate a perpetual improvement in their living conditions.
Keywords: Microfinance, Loans, Credit, Poverty Reduction, Ghana