Evaluation of Women Group Lending Scheme of Bonzali Rural Bank, Tamale

Abstract

Micro financial institutions step in to lend to group of people where the entire group is considered responsible for default by any member. In places where group loans have been practiced, there have been mixed results with some groups repaying their loans whiles others fail to pay. The study therefore sought to evaluate women group lending scheme at Bonzali Rural Bank (BRB) in Tamale. The objectives of the study were to determine the characteristics and motivations of women in the group lending scheme, examine the factors that influence the repayment rate of women groups and to assess the benefits of group lending to the group members. Data were collected from all the 88 women groups. Both primary and secondary data were used. The primary data was collected using questionnaires which was administered to the group representatives. Data was analyzed using descriptive statistics and represented by measures of central tendency. Frequencies and percentages were used to analyzed the characteristics of respondents such as age, educational attainment and religion. The study found out that most women repay their loans in order to get bigger loans in future (dynamic incentives). Other reasons include: it provides capital for their businesses; it improves their financial well-being and to preserve their reputation. It was recommended that the BRB should improve on the business advices offered to the women since the successes of the women groups have a positive impact on the repayment of loans.