There is a long standing debate in global development literature on the reliability and sustainability of microfinance to alleviate poverty. In 2006, the Government of Ghana established the Microfinance and Small Loans Center (MASLOC) to “provide, manage and regulate…funds for microfinance and small scale credit schemes…” MASLOC is critical to the Government’s poverty reduction strategy, but there are concerns regarding whether MASLOC is targeting beneficiaries in an equitable and accountable manner; the extent to which it is reducing poverty through job and wealth creation; and whether MASLOC credit schemes are a sustainable tool for ensuring social protection in Ghana.
This study uses Difference-in-Differences (DID) approach to evaluate the impact of small loans on the development of small businesses, and on the livelihoods of their owners. It will also assess the quality of beneficiary targeting, as well as financial sustainability of the center. In this study, randomly sampled micro and small business owners who benefit from two of MASLOC’S loans schemes in the Great Accra and Ashanti Regions will constitute the treatment group. Non-borrower business owners of similar businesses, and from the same regions, will be used to construct an intervention group. The findings are expected to guide MASLOC’s policies and programs on wealth and job creation. The study a partnership with Ghana’s MEMO (Ministry of Monitoring and Evaluation).
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