Spatial and Socio-economic Dimensions of Clients of Microfinance Institutions in Ghana

This paper contributes to the debate on spatial and socio-economic dimensions of microfinance interventions by examining the backgrounds of MFI clients and non-clients in Ghana.

The study collected data from 1,628 client households from 17 MFIs and 1,104 non-client households in three ecological zones of the country. It used the Microfinance Poverty Assessment Tool to analyze clients' background and MFI outreach. Findings include:

• Two regions of high well-being are ringed by relatively well-off areas;
• Highest levels of poverty are found in the northern parts of the country;
• MFIs served more poor clients in less well-off areas at the national level, but comparison within regions showed higher reach to non-poor even in these poor areas;
• Outreach by gender was minimal;
• Clients in self-employed agriculture tended to be in the lowest quintiles compared to those in non-farm activities.

The study concludes that targeting less well-off areas at the national level will automatically lead to supporting the poor, but recommends addressing within-area variability. It also recommends gender-based strategies to target women and policies to focus on clients in agriculture.