The Effect of Microfinance Institutions on the Growth of Small Businesses in Kumasi, Ashanti Region of Ghana

Assessing the impact of MFIs on small businesses in Ghana

This paper studies the effect of MFIs on the growth of small businesses (SBs) in the Ashanti region of Ghana over the last two decades. It assesses the services MFIs render to SBs, how SBs manage and utilize MFI credits, and the challenges both face in dealing with each other. The research for the paper is based on a sample of 20 MFIs and 200 SBs and it covers the following sections in detail:

  • Definition of SBs and MFIs;
  • Literature review of the relevant literature in this field with a focus on publications discussing the objectives and activities of MFIs, SB finance initiatives in Ghana, impact assessment of MFIs on SBs, challenges of SBs in adopting MFI loans, and government’s intervention in MFI activities;
  • Methodology used for the study and extensive analysis of data with a focus on general information on SBs, core and auxiliary services provided by MFIs to SBs, effect of these services on the growth of SBs, management and utilization of MFI loans by SBs, and challenges faced by SBs in dealing with MFIs;
  • Results of correlation and regression analysis on the impact of MFIs on SBs;
  • Recommendations to increase impact and suggestions for further research.

About this Publication

By Attefah, K.J., Mintah, E.K. , Agyeman, F.K.A.