Abstract:
Even though great progress has been made towards achieving the Millennium Development Goals by reducing poverty, people continue to live in extreme poverty and more than two thirds of the world poor reside in rural areas. As a result, spatial inequality in development still exists between rural and urban areas due to lack of economic growth and effective policies for rural development. In order to examine microfinance and poverty alleviation in the Hohoe Municipality, the study employed economic and social variables as benchmarks for measuring the impact of microfinance. A total of 150 respondents were sampled. The study revealed that microfinance has not brought any significant difference in the economic well being of beneficiaries because the monthly income of both beneficiaries and non- beneficiaries has a very close mean rating. Also, the health and nutritional level of both beneficiaries and non-beneficiaries fall in the same range indicating that the social goal of microfinance in reducing poverty has been largely unmet.
On the material possession of the respondents, it was clearly observed that both beneficiaries and non-beneficiaries of microfinance are not able to acquire expensive commodities but only the basic necessities of life. However, the study discovers that microfinance can help agricultural households to invest in their own businesses, educate their children, and promote their overall well-being. This study recommends among other things that MFIs should design appropriate products that are flexible enough to meet the different needs of rural agricultural households for both production and consumption purposes. It is hoped that the study will serve as a ‘spring board’ for further studies and thus provide the necessary information needed for financing rural agriculture in the Hohoe Municipality.
