Effects of Microfinance on Poverty Reduction in the Sefwi Wiawso District

CHAPTER ONE

GENERAL INTRODUCTION

1.0 Background of the study
Poverty is a widespread canker worldwide and every government has stepped in to save her citizens by adopting various policies. Poverty, to many authors, is the prime symptom of all diseases and early death of many people; especially in the developing countries where income is generally low, savings are hardly talked of resulting in low investment and employment. In the Sub-Saharan region, Ghana is no exclusion of the poverty story with over 60% of her population resident in the rural areas. Many areas in the country are marked deprived (areas lacking mostly the basic amenities like health facilities, education, water, electricity and the like) and this includes Sefwi Wiawso. Poverty in the area is so common that the people can hardly sustain their daily livelihood throughout the year let alone to talk of financing their children’s education and meet their health needs.

The people of Sefwi Wiawso District whose main occupation is farming lack the necessary finance to acquire inputs to enable them increase the yields from their farms. This incapacitates them of making a sound living from their farms. The United Nations Development Programme (UNDP) Microfinance Project, the Social Investment Fund (SIF) and the Agricultural Services Sub-sector Investment Programme (AgSSIP) exist in the District yet it is extremely difficult for the farmers and micro business owners to access any fund from them.

To strengthen the effort to reducing the widespread phenomenon of poverty in Sefwi Wiawso, various non-governmental organizations (NGOs) and other institutions also emerged in the area. TechnoServe, the German Technical Cooperation Agency (GTZ), International Institute for Tropical Agriculture (IITA) and ICDV Vocal came in to assist farmers with most of their input needs on what is termed ‘Input-Based Credit’. This is to enable the poor farmer to acquire and use this inputs and pay after the season’s

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