The Impact of Micro and Small Enterprise Development on the Rural Poor: A Study of Beneficiaries of the Rural Enterprises Programme at Asuogyaman District

Abstract

In Ghana there is dearth of knowledge about the role of Micro and Small Enterprises (MSEs) in alleviating poverty at the rural areas. It is increasingly being recognized among scholars, policymakers and private sector practitioners that MSEs are a potentially powerful tool for economic development and poverty reduction. In Ghana, the practice of MSEs promotion as an official development intervention strategy commenced in 1995 once the Rural Enterprises Programme (REP) was piloted to address livelihood challenges of the rural poor. The key question on whether poverty can be reduced through MSE development, particularly in the context of rural Ghana is not clear. To address this question, this study examined the MSE framework as it relates to poverty reduction by using beneficiaries of the Rural Enterprises Programme at Asuogyaman District as a case study. The research was based on reviewing relevant literature together with the collection and analysis of empirical data from REP beneficiaries and programme staff. A mixed method design was used to uncover the effects of MSEs on poverty reduction in rural Ghana. For the quantitative aspects of the study, a questionnaire was administered to sample of 216 respondents who are beneficiaries of the programme. The study also engaged in qualitative interviewing of 3 programme staffs. The main findings of the study are as follows: First, beneficiaries have benefitted from Community Based Training programmes, periodic follow ups and return visits to clients, counselling services, facilitating NVTI Certificate examination for master craft persons and apprentices, entrepreneurship and management seminars, and business support services. Second, even though study participants were not typically poor, they had challenges with the economic dimensions of poverty. The majority, i.e. women had challenges joining the rural labour forces with less developed skills and low capacity to run a small business. Third, participants have encountered increases in their earnings and more over all enhancement in their livelihood. Beyond being empowered to engage in some productive employment, participants are enabled to have ownership of productive enterprises. Fourth, even though the test statistic was done to determine the relationship between gender and welfare attributes before and after the programme intervention, there was a positive change for both males and female beneficiaries in terms of their overall economic situation and living standards. Last, the study revealed that the entrepreneurial/rural poor are empowered to engage in productive activities and work for their own success. The findings from this research show that MSEs development indeed reduce poverty particularly among women. This thesis proffers more MSE intervention and more women should be targeted during the design phase.