The authors of this article examined which groups of people in northwestern Ghana were more and less likely to borrow money from microfinance institutions (MFIs). The authors conducted interviews and questionnaires, and then analyzed the responses through statistical modeling. The interviewees comprised microfinance clients as well as staff of municipal governments and MFIs.
Within this dataset, higher customer age, engagement in farming and living a longer distance from the nearest MFI branch were negatively associated with obtaining credit from an MFI. On the other hand, the availability of longer repayment terms as well as higher levels of employment, household assets, household size, and access to information and education were positively associated with obtaining MFI credit.
Male clients were more likely than women to access credit through semi-formal MFIs and indigenous credit systems. The authors posit this may be because the formal credit providers in Ghana often give preference to women.
The authors underscore the importance of access to financial information and recommend that the industry work to expand access to financial education. They also suggest that regulators establish uniform repayment terms for all sources of credit to simplify access to finance for both individuals and businesses.
This is a summary of a paper by Paul Bata Domanban, Fauster Agbenyo and Samuel Sekyi; published by Cogent Business and Management; March 2023; 20 pages; available at https://doi.org/10.1080/23311975.2023.2188645.
By Vaughn Rajah, Research Associate
Additional Resources
Cogent Business & Management webpage
https://www.tandfonline.com/loi/oabm20
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