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Microfinance and Rural Household Development

Author

Listed:
  • Julius H. Kotir

    (King’s College London, United Kingdom. Email: kotir22@yahoo.com)

  • Franklin Obeng-Odoom

    (University of Sydney, Australia. Email: fobe7790@usyd.edu.au)

Abstract

Though at the theoretical level, micro-credit is said to play a significant role in poverty reduction, empirical work on the role of micro-credit in poverty reduction is mixed with some studies indicating high levels of employment and income generation and others suggesting a worsening of poverty with micro-credit. Does micro-credit really get to the poor? Does it enhance or impede their productivity? Based on a study of 139 households in one rural area in the Upper West Region of Ghana, we find that: (a) Beneficiaries of micro-credit divert a significant portion of such loans into household consumption – albeit with moderate impact on house-hold productivity and welfare and (b) Micro-credit has modest impact on rural community development.

Suggested Citation

  • Julius H. Kotir & Franklin Obeng-Odoom, 2009. "Microfinance and Rural Household Development," Journal of Developing Societies, , vol. 25(1), pages 85-105, January.
    • Handle: RePEc:sae:jodeso:v:25:y:2009:i:1:p:85-105
    DOI: 10.1177/0169796X0902500104
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    References listed on IDEAS

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    Cited by:

    1. Farrin, Kathleen M. & Miranda, Mario J., 2013. "Premium Benefits? A Heterogeneous Agent Model of Credit-Linked Index Insurance and Farm Technology Adoption," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149666, Agricultural and Applied Economics Association.
    2. Farrin, Katie & Miranda, Mario J., 2015. "A heterogeneous agent model of credit-linked index insurance and farm technology adoption," Journal of Development Economics, Elsevier, vol. 116(C), pages 199-211.
    3. Nordjo, R. & Adjasi, C., 2018. "The Impact of Finance on Welfare of Smallholder Farm Household in Ghana," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277142, International Association of Agricultural Economists.
    4. Nathanael OJONG, 2014. "Credit Unions As Conduits For Microfinance Delivery In Cameroon," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(2), pages 287-304, June.
    5. Ian Carrillo, 2013. "The successes and challenges of microfinance," Chapters, in: Gary Paul Green (ed.), Handbook of Rural Development, chapter 11, pages i-ii, Edward Elgar Publishing.

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