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A critical examination of ghana’s plan microfinance scheme and its impact n the socio-economic livelihoods of small-scale female entrepreneurs. (case study of lower manya krobo municipality, eastern region, ghana)




The United Nations designated 2005 as the “Year of Microcredit.” Microfinance or microcredit operations have been hailed as a sure means of eliminating poverty in the third world, particularly for women, particularly women in rural regions, since the mid-1990s. Microcredit appears to offer three things: reduction of poverty, empowerment of women, and improvement of family planning knowledge and practices (Giersing, 1999). Microcredit distribution to entrepreneurs of small and micro companies (SMEs) in developing nations is increasingly being considered as a strategic strategy of supporting the so-called “working poor” (ILO, 1998). As a result, a significant amount of multilateral and bilateral money has been funneled into microfinance programs in poor nations, with various degrees of effectiveness (Afrane, 1997).

Microcredit programs provide very poor people with tiny loans for self-employment initiatives that generate revenue, allowing them to care for themselves and their family (Daley-Harris, 2002). Similarly, Wright (2000, p. 23) claims that “it is the most cost-effective way of lifting the poor out of poverty.” The main goal behind micro-lending is to make money available to traditionally disadvantaged populations, such as the poor, rural, and women, who are not typically considered for standardized banking loans and lending assistance. In this context, microcredit groups are frequently presented as a solution or panacea to Third World poverty since they enable individual borrowers grow their income and thereby lessen poverty for the poor in developing countries (Hanak, 2000). Furthermore, Hanak claims that microcredit ventures are a viable anti-poverty approach since they are “an instrument to shift gender relations to women’s advantage, as well as a promising program to produce employment and income on a large scale” (p. 5).

According to Daley-Harris (2002), microcredit is a tried and true approach to help families get out of poverty. To support the preceding statement, Shahidur (1998) concluded that “microcredit programs fight poverty at its source by raising participants’ household consumption expenditure” (p. 56).

Several African countries, notably Ghana, Guinea, Tanzania, and Uganda, have historically relied on state-owned banks to provide rural lending and microfinance services, which have frequently resulted in substantial losses and have had to be reorganized (Daley-Harris, 2002). According to Daley-Harris (2002), the experience of failed state-owned banks has pushed African governments to focus on financially sustainable means to providing microfinance, as well as on building regulatory and supervisory structures that will support such initiatives. In Ghana, for example, NGOs have worked significantly in the northern part of the country, where licensed microfinance banks are sparse (IMF, 2004). Again, the IMF (2004) adds that numerous development techniques targeted at poverty reduction in developing countries have been devised by policymakers, international development agencies, non-governmental organizations, and others. One of these solutions, which has grown in popularity since the early 1990s, is the microfinance plan, which provides financial services to the working poor in the form of savings and credit opportunities (Johnson & Rogaly, 1997).

Farmers are the poorest within a category of employees and dealers, according to the National Development Planning Commission [NDPC] (2003) in the GPRS I. This demonstrates that the majority of farmers are unable to provide for their families’ needs, such as better education for their children, better health care, clothing, better housing, and better nutrition, among other things. According to Daley-Harris (2002), one of the major pillars of the GPRS II is to “reduce poverty and thus using microfinance schemes particularly focused on the vulnerable, particularly women, as strategy is likely to help the country achieve its economic growth and poverty reduction targets by 2015, as indicated in the policy document” (p. 45).

The contributions of SMEs to the success of the majority of African countries are critical since they form the backbone of their economy. However, the role of SMEs in these economies has received no state assistance, notably finance, as the so-called “work poor” have difficulty obtaining credit from banking institutions and organizations. According to the IMF (2004), small businesses and the majority of the poor in Sub-Saharan Africa have very limited access to financial deposits and other financial services supplied by official financial institutions. It goes on to say that in Ghana, only 56% of the population has access to the formal banking industry.

Plan Ghana, a humanitarian and development non-governmental organization (NGO) with no religious, political, or governmental affiliation, began operating as a microfinance institution in Ghana’s Eastern and Central regions in 1999 to enable Ghanaians, particularly rural people, to have access to credit facilities. Currently, the organization’s operations have expanded to several more towns, including Wa and Tumu (Plan Ghana, 2012). It has also sponsored 24,730 children in 259 partner villages spread over 12 Ghanaian districts in the Central, Eastern, and Upper West regions (Plan Ghana, 2012).

Ghana’s activities should include the following:

  1. Improving children’s development via quality formal education in conjunction with the Ghana Education Service by providing schools in the area with a variety of teaching and learning materials as well as scholarships.
  2. Guaranteeing child survival by addressing nutritional issues in the community through working with the Ghana Health Service in training community volunteers as Child Growth Promoters to monitor the growth of children in the community
  3. Encouraging kid participation by making children aware of their rights and duties through the development and training of children clubs in which they are encouraged to speak openly about issues affecting communities.
  4. Decreasing child poverty by increasing maternal income levels through microfinance programmes in partnership with Manya Krobo Rural Bank, nicknamed credit and savings with education. As of the end of 2012, the organization had served 8,913 clients in 251 localities, including 7,933 women and 980 men, with a loan of $1,769,317. (Plan Ghana, 2012).


Poverty reduction has been a major issue for Ghana’s successive governments because it is often seen as the most effective way of attaining economic progress in the country. The intended goal is to boost people’s living standards and improve their quality of life. As a result, various economic policy reforms are being sought in order to achieve this, but the impact has not been seen by everybody, particularly those in rural areas (Obeng, 2011). As a result, the Ghanaian government granted licenses to many microcredit organizations in the country.

According to the IMF (2004), most Ghanaians do not have access to the official banking sector, making it difficult to obtain loans. Women in the Lower Manya Krobo Municipality work in a variety of small-scale companies such as petty commerce, food vending or “chop bars,” and farming, all of which contribute significantly to the country’s Gross Domestic Product (GDP). Agriculture (farming) generated 27.27 percent of GDP in 2011, according to the World Bank (2012). Regardless of their contributions, the ambition to expand their enterprises is always hampered by the rigorous credit requirements imposed by conventional financial institutions.

According to the African Development Bank (2002), assisting disadvantaged women in earning an income entails removing the barriers to political, legal, and social restraints that act against them. Although microcredit cannot completely eliminate poverty, it can help to alleviate it to some level. According to Plan Ghana (2007), it has had considerable success in reducing poverty in its operational areas. To either corroborate or contradict Plan Ghana’s assertion, this study intends to analyze the impact of its activities on the socioeconomic livelihoods of small-scale female entrepreneurs in Ghana’s Eastern Region’s Lower Manya Krobo Municipality.


The primary aim of this study is to critically examine Ghana’s Plan Micro finance scheme and its impact on the socioeconomic livelihoods of small-scale female entrepreneurs in Ghana’s Eastern Region’s Lower Manya Krobo Municipality. Thus, the following are the specific objectives;

  1. To investigate the if Plan Ghana’s Microfinance Scheme helped beneficiariesineducatingtheir children.
  2. To determine how Plan Ghana’s Microfinance Scheme helps the beneficiaries intheirpersonal development plans.
  3. To determine whether Plan Ghana’s Microfinance Scheme have any positive effect on the incomelevelsofitsfemale beneficiaries intheMunicipality.


The following questions guide this study;

  1. Did Plan Ghana’s Microfinance Scheme helped beneficiariesineducatingtheir children?
  2. How does Plan Ghana’s Microfinance Scheme help the beneficiaries intheirpersonal development plans?
  3. Does Plan Ghana’s Microfinance Scheme have any positive effect on the incomelevelsofitsfemale beneficiaries intheMunicipality?


As previously said, small-scale enterprises contribute significantly to Ghana’s economic development and account for the bulk of firms in the country. Given the importance of SMEs to Ghana’s development agenda, this study would serve as a source of data for Plan Ghana to examine their activities and operations. The findings will assist funders and non-governmental organizations (NGOs) such as Plan Ghana in determining the value of their financial assistance to small-scale female businesses in the Municipality.

The study’s findings on demographic and socioeconomic features would also allow other stakeholders in the microcredit business to better target their schemes and beneficiaries. It will also provide small-scale female entrepreneurs with the information and skills needed to manage their finances on their own, allowing them to become self-sufficient and, as a result, help eliminate poverty. Similarly, the study’s findings would provide microfinance institutions and researchers with further literature on microfinance in Ghana.


The study was delimited to the operations of Plan Ghana in the LowerManya Krobo Municipality of the Eastern Region of Ghana.This organizationwas chosen because its operations are tilted towards female entrepreneurs. Also,the study assessed the impact of Plan Ghana’s operations on the livelihoods of thefemale beneficiaries in the Municipality.


Asides the fact that this study faced an unwillingness of the respondents to share information, which caused a delay in the completion of this study, impact in the context of this study was measured as perceived by the respondents. The conclusions and generalization would, therefore, be applicable to Plan Ghana and its female beneficiaries in the Municipality.


  1. LIVELIHOOD:Simply refers to the means of securing the necessities of life. A livelihood is a means of making a living. It encompasses people’s capabilities, assets, income and activities required to secure the necessities of life.
  2. ENTREPRENEUR:An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as entrepreneurship. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.
  3. MICRO FINANCE:Microfinance refers to the provision of financial services to low-income clients, including the self- employed


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