Microcredit and Poverty Reduction in Ghana
Microcredit and Poverty Reduction in Ghana
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Date
2022-05
Authors
Effah , Eric Sarkodie
Baafi, Joseph Antwi
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Publisher
Proceedings of the 30 th International Conference
Abstract
Interest in poverty sprang across the world and necessitated a worldly reduction policy strategy through the millennium development goals. The emergence of the Sustainable
Development Goals (No Poverty by 2030) has taken interest in poverty to a higher level. In search for strategies to combat poverty, one strategy was common to all: microcredit. Governments, donors and NGOs around the world responded
enthusiastically. In the acknowledgment of microcredit, the UN celebrated the year 2005 as a year of microcredit (Mia, 2005). As a result, microcredit as a financing instrument is
perceived to be effective means against hunger and poverty (Duflao, 2007). Ghana stands visible in the area of microcredit (319 microcredit institutions as at March, 2018-
BoG, 2018). However, few studies have investigated the effects of microcredit on poverty reduction in Ghana. The factors used are purely qualitative and lacks the
quantitative components. Moreover, these studies viewed poverty from a single dimension and lacked nation-wide coverage. This study employs the Foster, Greer and
Thorbecke (FGT) measures of poverty to provide diversified ways of measuring poverty. Also the study adopted the ordered logistic regression to analyse the effect of
microcredit on poverty. It was found that amongst ten administrative regions, the incidence of poverty and poverty gap are not evenly distributed. Also, persons who take
loan are likely to move into a better welfare bracket and thus reducing poverty. It is recommended it has to be the policy of the central government to educate it citizens on
microcredit.
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Citation
Obeng, C. K. (2011). The impact of micro-credit on poverty reduction in rural areas: a case study of Jaman North District, Ghana (Doctoral dissertation).