The Effect Of Microfinance On Human Capital Development In Ghana: The Case Of Sinapi Aba Trust Microfinance Beneficiaries In Ashanti Region

Abstract

Microfinance institutions provide services to raise income and consumption levels of families, reduce income inequality thereby, creating opportunities for investment in assets such as human and social capital development. The paper provides empirical evidence on how microfinance services contribute to developing human capital of beneficiaries to reduce poverty in Ghana. Crosssectional approach was employed to gather data from 363 beneficiaries of Sinapi Aba Trust (SAT) microfinance services in 2012, using both quantitative and qualitative tools. Findings indicate that microfinance services enable beneficiaries to expand their human capital assets. Aside the beneficiaries own efforts, SAT included education programmes that added up to enhancing beneficiaries outlook regarding the non-financial aspect of poverty reduction. SAT services provided awareness creation and sensitisation workshops to inform beneficiaries about topical issues that were development oriented for beneficiaries and their households. The study among others recommended that, government, sponsors and managers of microfinance should collaborate to pull resources for human capital development of beneficiaries.