Shylock vs. Antonio: informal money lending in rural communities in the Jaman North District, Ghana

Abstract

This paper examines lending and borrowing in a rural setting, and the implications for microfinance schemes in the Jaman North District of Ghana. Using a qualitative research methodology, the study purposively selected two lenders and eight borrowers from two rural communities in the District. It was found that rural farmers borrow at an interest rate of 100% per annum, and in default lose their cocoa farms (one of their major livelihood asset). Meanwhile, respondents are aware of the existence of bank loans at lower interest rates, but are not willing to access it due to perceived complexities. However, none of the respondents had a bank account, or is aware of micro-finance department/unit of rural banks in the District. It is recommended that rural banks in the District should engage in diversified sensitization approach which seeks to demystify the perceived complexities and enhance behavioural change and hence improve the sustainability of the livelihoods of rural dwellers