Assessing the Impact of Microfinance and Small Loans Scheme (Masloc) as a Poverty Reduction Strategy in the Sunyani Municipality

doi:10.7176/jesd/13-2-04

Abstract

The study assesses the effects of MASLOC as poverty reduction strategy in the Sunyani Municipality. A case study design was adopted with a descriptive survey as the main study design and approach. Structured questionnaire was employed as the main data collection instruments to collect primary data from 112 MASLOC beneficiaries in the Sunyani Municipality of the Bono East Region. Both purposive and simple random sampling techniques were used to select the sample size. The study outcome shows that the level of poverty among beneficiaries before becoming MASLOC beneficiaries in the Sunyani Municipality was high and could hardly afford basic needs of life. However, after experiencing MASLOC, their status improve and could afford basic needs such as medical bills, school fees and other educational needs and even start and expand businesses and improve product and customer services. Again, the study discovered challenges to the MASLOC beneficiaries: high interest rate on loans, lack of collateral security to secure loans, stringent credit conditions, administrative costs associated with processing loans, biasness of MASLOC staff, among others. Finally, significant positive effects on improving the living standards of beneficiaries were concluded. The study recommended management of MASLOC to collaboratively work with the National Commission for Civic Education and other media organizations to develop and implement an advocacy and sensitization programme. Also, a good system that makes it very easy and fair for poor people to access credit from the scheme should be created. The Government of Ghana (GoG) should implement policies that make it favourable for poor people to access credit facilities from MASLOC and other Financial Institutions that grant credit to poor people. Keywords: Microfinance , Small Loans Scheme, Poverty, Poverty Reduction, Small Business DOI: 10.7176/JESD/13-2-04 Publication date: January 31 st 2022

Highlights

The subject of poverty has gained much prominence and has become the main developmental agenda of many national and international organizations all over the world due to its devastating effects on social and economic welfare on the human race especially for developing nations
To address the poverty gap, the Government of Ghana implemented several interventions ranging from livelihood enhancement programs to support program for enterprise development and the setting up of microfinance institutions under the Ghana Poverty Reduction Strategy (GPRS) II to provide loans to the marginalized productive poor as a tool for reducing poverty and creating jobs (BOG, 2015)
5.2 Conclusion First of all, it can be emphatically concluded that the level of poverty among beneficiaries before becoming Microfinance and Small Loan Centre (MASLOC) beneficiaries in the Sunyani Municipality was very high which made them jobless, prevented them from improving the quality of their business products and services, made it difficult feeding and clothing their families as well as unable to afford education and provide for their other educational needs

Summary

Introduction

The subject of poverty has gained much prominence and has become the main developmental agenda of many national and international organizations all over the world due to its devastating effects on social and economic welfare on the human race especially for developing nations. To address the poverty gap, the Government of Ghana implemented several interventions ranging from livelihood enhancement programs to support program for enterprise development and the setting up of microfinance institutions under the Ghana Poverty Reduction Strategy (GPRS) II to provide loans to the marginalized productive poor as a tool for reducing poverty and creating jobs (BOG, 2015). One of such key programme was the Microfinance and Small Loan Centre (MASLOC)

Objectives

Results

Conclusion