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 harvest and on very flexible terms. The Rural and Community Bank (RCB), ARB Apex Bank, Savings and Loans Companies, Ghana Co-operative Credit Union and the UN funded Social Investment Fund (SIF) are all contributing in this area. Unfortunately, soil fertility has fast depleted coupled with irregular rainfall and small farm holdings, the yield per hectare is hardly self-sustaining resulting in low incomes and so a farmer can hardly afford to live on the paltry and seasonal income.
1.1 Statement of the research problem
Sefwi Wiawso is well-endowed with valuable natural resources – both agricultural land and minerals. This resource base made Sefwi, one of the deprived areas in the upper Western Region of Ghana and predominantly a farming area, producer of the bulk of Ghana’s cocoa yearly. With this remarkable contribution to the national economy, it is hoped that income from cocoa and other resources will transcend subsistence and lead to development of small and medium scale enterprises (SMEs) in the area and hence employment and sustainable income but Sefwi rather remains poverty stricken community.
Despite the above interventions, the needs of the people could hardly be met. Both farmers and small business operators still demand a lot of funds to expand their ventures to be able to make enough earnings to survive their families, finance their wards’ education, and meet their health needs. The establishment and operations of MFIs in Sefwi area was welcoming news to the citizens as their activities are helping to augment the existing interventions by narrowing the wide poverty gap and financially facilitating and strengthening all economic activities in the district.
This study sought to look at the activities of microfinance institutions operating in the Sefwi Area paying particular attention to how they are helping to reduce poverty in the area.
1.2 Research objectives
The study seeks to identify the major activities of MFIs operating in the Sefwi...