The Effects of Microfinance Services as Poverty Intervention Strategy on Rural Household Livelihood Outcomes: The Case of Plan Ghana's "VSLA Microfinance Scheme" in Two Districts in the Central Region, Ghana

Abstract

This study aimed at examining the effects of Plan Ghana's VSLA microfinance scheme on beneficiary households' livelihood outcomes in the Ajumako-Enyan-Essiam and Ekumfi districts in the Central Region, Ghana. The study employed cross-sectional evaluation design. Primary data were collected from 300 beneficiaries and 150 non-beneficiaries from 28 rural communities. Statistical Product and Service Solution (SPSS) was used to generate descriptive statistics, t-test, correlation, and multiple regression results for the discussions. The results from the study generally revealed that the scheme has had positive effects on both monetary and non-monetary livelihood outcomes of the beneficiaries. Independent-samples t-test showed a significant difference in income for beneficiary and non-beneficiary households (t=8.138; p=.000 at 0.05 alpha level). The t-tests on food security and education for beneficiary and non-beneficiary households also showed significant difference (t= 6.19; p=.000 and t=7.94: p=.000 respectively). T-test on housing improvement, however, showed insignificant difference (t=.805; p=.422). The multiple regression analysis showed that, microfinance scheme participation, sex and the type of enterprise participants engaged in contributed significantly to explaining the level of the overall livelihood outcome of the beneficiary households. The VSLA scheme has proven to have the potential of improving the livelihood outcomes of its beneficiaries. It is, therefore, recommended that lite scheme should be encouraged and expanded by the service providers (Plan Ghana) to cover other parts of the region where it has not yet reached.