Effects of microfinance on micro and small scale enterprises in Efutu municipality, Winneba: A case study of centre for informal activities and development

Abstract

This study examined effects of CIAD’s microfinance on small and medium enterprises in the Efutu Municipality, Winneba in the Central Region. .The population of the study comprised clients and staff of CIAD. A sample of 71 clients and five staff was used for data collection. Two interview guides were used separately to collect data from staff and clients. The return rate of data collection was 5(100%) for staff and 66(92.9%) for clients. Data collected was analysed manually and electronically. The statistical product and service solution was used for the electronic analysis in which descriptive statistical tools were used for data presentation and discussion. Results of the study indicated that CIAD’s microcredit schemes impacted positively on the social and economic lives of SMEs operators. The businesses were able to increase their capital, assets and expanded the MSEs, which reflected in their social lives. Also, other MSEs were set up to create employment for the unemployed and savings culture of clients was enhanced. In spite of the benefits, there were some challenges which included repayment difficulties, payment of multiple taxes, lack of market for products and services and high interest rates. Recommendations were made to CIAD. Specifically, CIAD was asked to put in measures that could help reduce interest rates, train operators of MSEs on proper business practices and MSEs were asked to adopt effective bookkeeping modalities.