Effect of Micro Savings on Poverty Reduction in Central Region of Ghana

Abstract

The study sought to investigate the effect of micro savings on poverty reduction from the perspective of microfinance clients who are also entrepreneurs of micro small and medium enterprises in the Central Region of Ghana.  The Ghana Living Standards Survey (2014) found that over 6.4 million of Ghanaians representing 24.2 percent of the population lived below the poverty line in spite of the numerous interventions instituted by government and development partners over the years to address poverty.  The Specific objectives of the study was to establish the effect of micro savings on poverty reduction in Central Region of Ghana.  One hypotheses was formulated to cover the specific objective which was operationalized into four sub-hypotheses.  Using cluster sampling techniques, the study sampled 370 entrepreneurs of micro small and medium enterprises.  Questionnaire was used as the data collection instrument in an exercise that took place in November and December 2016.  SPSS was used to analyse the data using cross tabulations and multiple regression analysis.  The study found that micro savings had a statistically significant positive effect on growth in income and acquisition of business assets.  It however had a relatively weak positive effect on consumption expenditure and a moderate effect on ability to educate children as poverty indicators.  Accordingly the study rejected all the null hypothesis and concluded that microfinance interventions are effective at reducting poverty in Central Region of Ghana.  The study cites limitations encountered and recommends areas for further studies.