The Awareness of Micro Finance in Developing Economies and its Impact

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ACKNOWLEDGEMENT

I would like to take this chance for thanking my research facilitator, friends & family for the support they provided & their belief in me as well as guidance they provided without which I would have never been able to do this research.

DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with the university.

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Abstract

This dissertation will be analysing the main strategies that have been followed by developing MFIs for facilitation of self employment for the people living below the poverty line, particularly, by providing financial assistance by giving away loans at affordable rates to such people. This dissertation will look into the case of Ghana, particularly, since it is a developing economy and is facing high level of poverty. This will help in better understanding of the functions of Micro Financing and how has it been perceived, used and understood by the government and citizens. The dissertation will first carefully study the literature present in the subject of microfinance and how it has helped other nations such as Bangladesh to alleviate poverty, and will also look at the literature present with context to Ghana, as to what role id microfinance playing in the Ghanaian context. Moreover, after a thorough literature review, this dissertation will use quantitative data to study the effects of microfinance in Ghanaian society with bot descriptive as well as regression analysis. After the in-depth analysis of the awareness and situation of MFIs in Ghana, recommendations were given for the commercialisation of Micro Financing and its limitations too.

TABLE OF CONTENTS

ACKNOWLEDGEMENTii

DECLARATIONiii

Abstractiv

CHAPTER I: INTRODUCTION1

1.1 Background1

1.2 Part of Microcredit in Socio-Economic Development3

1.3 Part of Microcredit in Natural Resource Management4

1.4 Community-Based Resource Management5

1.5 Social Learning6

1.6 Problem Statement7

1.7 Purpose of the Study9

1.8 Relevance9

1.8.1 The Experience of Poverty: Voices of the Poor9

1.9 Aim of the Study11

1.10 Research Objective12

1.11 Research Questions12

1.12 Hypothesis13

1.12 Significance of the Study13

1.13.1 Banks13

1.13.2 Government13

1.13.3 MFI Members14

1.13.4 Academics14

CHAPTER II: METHODOLOGY15

2.1 Methodology15

2.2 Quantitative Research Design16

2.3 Qualitative Research Design17

2.4 Ethics18

2.5 Credibility18

2.6 Data Analysis19

CHAPTER III: LITERATURE REVIEW21

3.1 Microcredit21

3.2 Aim of Microcredit22

3.3 How It Works22

3.4 Microcredit Problems26

3.5 Local Moneylenders28

3.6 The Need for Microcredit29

3.7 Is Microcredit Appropriate for Poverty Alleviation?31

3.8 The Concentrate on Group and the Uses of Microcredit31

3.9 Role of Microcredit33

3.10 Microcredit in Poverty Alleviation and Socio-Economic Development34

3.11 Microcredit in Natural Resource Management36

3.12 Microcredit in Women Empowerment37

3.13 Poverty & Microcredit39

3.13.1 Link between Microcredit & Poverty39

3.14 Biases45

3.15 Do the Poor Get Involved in Microfinance?47

CHAPTER IV: CASE OF GHANA50

4.1 Micro-finance in Ghana: Historical Overview50

4.2 The Adaptation of Micro-Finance as Poverty Reduction Program in Ghana55

4.3 Evaluating the Micro-Finance Sector in Ghana57

4.4 MFIs' Constraints in Ghana62

4.5 Conclusion63

CHAPTER V: ANALYSIS64

5.1 Descriptive Analysis64

5.2 Regression Analysis68

CHAPTER VI: CONCLUSION AND RECOMMENDATIONS70

6.1 Conclusion70

6.2 Recommendations75

6.2.1 Commercialisation of Micro-finance76

6.2.2 Commercialisation ...