The Impacts of a Microfinance Lending Scheme on Clients in Ghana

Global Journal of Business Research, Vol. 5 (2) pp. 79-88, 2013

10 Pages Posted: 2 Feb 2014

See all articles by Paul A Onyina

Paul A Onyina

Pentecost University College, Accra

Sean Turnell

Macquarie University - Department of Economics; Macquarie University, Macquarie Business School

Date Written: 2013

Abstract

Owning to the success of the Grameen Bank and other microfinance institutions in recent years, microfinance institutions’ role as a potential policy tool in poverty alleviation has received considerable attention. Empirical evidence from existing research shows some positive results in poverty reduction from some microfinance programs. This paper adds to existing literature on the industry by evaluating the effects of microfinance on clients who have received loans from the Sinapi Aba Trust of Ghana. Our data show that earlier clients in the program received greater impacts and are more empowered from the program than new clients, even though the latter on average receive larger volumes of credit. We construct empowerment indicators, finding that years of membership duration with the SAT lending scheme matters in empowering clients. The results show that old clients are more likely to purchase assets, expand their businesses, and spend larger amounts on their children’s education than new clients.

Keywords: MFIs, Credit, Impact, Assets, Income

JEL Classification: G23, O16

Suggested Citation

Onyina, Paul A and Turnell, Sean, The Impacts of a Microfinance Lending Scheme on Clients in Ghana (2013). Global Journal of Business Research, Vol. 5 (2) pp. 79-88, 2013, Available at SSRN: https://ssrn.com/abstract=2323675

Paul A Onyina (Contact Author)

Pentecost University College, Accra ( email )

P. O. Box KN 1739
Accra
Ghana

Sean Turnell

Macquarie University - Department of Economics ( email )

Sydney NSW 2109
Australia
(+61-2) 9850-8493 (Phone)
(+61-2) 9850-8586 (Fax)

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

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