Implications for Poverty Reduction in Rural Households in Ghana: Conclusions and Policy Recommendations

Implications for Poverty Reduction in Rural Households in Ghana: Conclusions and Policy RecommendationsThe coefficient of acesmf is given as 0.286 suggesting that beneficiaries of MFI loans spend on the average 29% per week on food more than non-beneficiaries of MFI loans. This is about 11% less than the weekly expenditure on basic needs (0.397) for beneficiaries holding all other variables constant. The mean of log weekly consumption expenditure on food for beneficiaries contingent on the above variables is was found to be 2.602 (260%) while that of non-beneficiaries is given as 2.587(258.7%).
The difference between the mean weekly consumption expenditure on food for the two groups is given as 0.015 (0.15%) contingents on all the statistically significant variables. The t-test of the null (H0) that the difference in weekly consumption expenditure for the two groups is equal to zero is not rejected given the t-test value of 0.777. This indicates that there is no marked difference in consumption expenditure on food for beneficiaries and non-beneficiaries of MFI loans. By this therefore, beneficiaries of MF would have been spending the same amount weekly on food even if they had not received MF and for that matter access to MFI loans have no impact on food consumption. See appendix B for the results of the Two-sample t-test with unequal variances for Weekly consumption expenditure on food.
This could be so because in the Upper East Region about 80% of the population are farmers who produce basically for domestic consumption and only sell some into the market if there is surplus food stuff. Thus households are able to produce substantial amount of food for their consumption. They may also spend some amount of money on food from the market to meet short falls in domestic production. Thus whether one receives MF or not, they must endeavour to meet their food consumption requirements as much as possible. Financial services markets

The study sought to evaluate the impact of access to microfinance on poverty reduction proxied by consumption expenditure on basic needs. The treatment effects estimation model was employed to solve the problems of selection bias and endogeneity. From the results and findings the conclusions from the study are that:
Respondents from the Kasena Nankani and Bawku West Districts have less probability of accessing or taking loans from MFIs than their counterparts from the Talensi-Nabdan, Bongo and Builsa Districts which are the reference categories. Again the amount of initial savings and the number of sources of borrowing that the respondent can actually borrow from within the community when in need of a loan reduce the probability of participating in an MFI programme and for that matter taking a loan from an MFI. Also the amounts of profit respondents make in a month and the number of friends of the respondent who have ever borrowed from an MFI increase the probability of participating in MFI programmes and for that matter taking a loan from an MFI. Also, Kasena, Bwest, oldsav, amtprof, depend, age, age1, numacty, Primary school, JSS/Middle are the variables that are significant in explaining consumption expenditure.
The implications are that respondents from districts without vibrant market centres have higher probability of accessing micro-credit from microfinance institutions. Again access to microfinance by rural women contributes positively to consumption expenditure and for that matter poverty reduction among the rural households in the Upper East Region.
It is therefore recommended that MFIs should endeavour to reach out to more rural women engaged in agro-processing. MFIs should lend out loans to more clients in Districts with very vibrant market centres. Also microfinance investment is recommended to broaden the scale and scope of beneficiaries reached and improve delivery strategies to suite context specific characteristics.

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