The purpose of the research was to find out how the microfinance activities of Akuapem Rural Bank have help to reduce the poverty levels among poor households in its catchment areas. The study was also to ascertain whether or not the activities of the microfinance of the Bank has any positive impact on the living conditions of the beneficiaries and the extent to which it has reached the unbanked population in the rural areas.
In the research process, ten (10) groups were selected of which seventy (70) respondents were chosen, seven (7) from each group. All the selected groups and respondents were done through simple random sampling. The Bank also provided information needed on the beneficiaries who patronized the microfinance activities from 2010-2015. All these information were put together and analyzed using Statistical Product and Services Solution (SPSS) version 16. The SPSS was used to generate frequency tables for the analysis. The data analyzed revealed that businesses of beneficiaries and their livelihoods have improved as a result of the microfinance scheme. Also, out of the seventy (70) respondents sampled, 37.1 per cent were new members who never had any banking experience before. This means that the microfinance had been able to reach out to some unbanked population in the rural areas.

It is therefore recommended that men must be included in the various groups to help alleviate the level of poverty faster in the rural areas. Also, the bank must expand the activities of the microfinance to cover more qualified people in the rural areas.

1.1 Background to the Study
Poverty is unrelenting and implacable enemy with a collection of weapon of child death, starvation, disease, illiteracy, violence, child trafficking just to mention a few. It furthermore can been as a circumstances where some group with similar characteristics continuously undergo deprivation with respect to fundamental necessities such as shelter, food, healthcare, education, access to communication tools , clothing among others. Moreover, others describe poverty as people or families with earnings under a certain threshold level regardless of their standards of living. This definition comprises low level of earnings, inaccessible healthcare facility, poor hygienic condition, lack of portable drinking water, high level of illiteracy rate, poor security and protection from preventable crime among others. (Nii K. 2002).

Poverty is a world phenomenon even though is more endemic in developing countries than the developed world. Records have it that seventy-five per cent of the world‟s poorest countries are located in Africa. In the last 30 years, extreme poverty incidence globally has decreased (from 40% to below 20%) but has little effect in African countries. Currently, in sub-Sahara Africa, more than 40% of people live in extreme poverty (our-africa.org)

In the case of Ghana, even though successive governments‟ implementation of policies had led to general decline in the poverty incidence in the country, poverty is still a force to reckon with in the deprived rural communities. It is unarguable that more than half of the nation‟s population lives in rural areas. Currently, poverty in the rural areas has become a great concern in the country making the poor people and their various deprived regions to live in absolute low standard of living environments. Records have it that, the poorest areas in the country are the three northern regions where individuals encounter chronic food insecurity and high level of illiteracy among the host of others. However, there are pockets of poor and extremely poor people in every region in Ghana.

The poverty situation in Ghana is cyclical one that the Government and other development partners have developed various policy interventions to help reduce it. Some of the intervention strategies adopted by government include; the National Youth Employment Program (NYEP), Livelihood Empowerment Against Poverty (LEAP), National Health Insurance Scheme (NHIS) and Microfinance and Small Loans Scheme (MASLOC) among others.

The NYEP was created in 2006 to help reduce the increasing level of youth unemployment with the desire to empowering Ghanaian youth so they could add positively to the socio-economic and sustainable development of the nation. This initiative had spread to rural areas where they employed the youth in the rural communities into one of the modules in the programme called youth in agriculture. This generated a source of livelihood for the rural folk‟s hence reduced extreme poverty among them.

LEAP is a government social cash grant programme which provides cash and health protection to extremely disadvantaged individuals or households across Ghana with at least one of three demographic categories; households with orphan or vulnerable child (OVC), elderly disadvantaged and person with extreme disability who are weak to involve themselves in any economic activities. The main objective behind this programme is to help eliminate extreme poverty among poor households in the country more especially in the rural communities. It is believed that the beneficiaries of this intervention are poorer than the country‟s rural average with a daily per capita expenditure grossly 85 US cent.

The MASLOC is a microfinance apex body responsible for implementing the government of Ghana microfinance programmes targeted at reducing poverty, creating jobs and wealth.

MASLOC does not only disburse micro and small loans to its clients but further provides business advisory services, preparation and capacity building for small and medium scale enterprises (SMEs).

The above policy interventions are premised on the ideology that poverty is extreme in rural communities in Ghana and the fact that the poor lack the ability to escape from extreme poverty themselves. The objective of these interventions is to eliminate extreme poverty and not to eradicate poverty in its entirety. It is therefore clear from global perspective that poverty reduction needed direct financial interventions in the rural communities.

Microfinance has been accepted by all stakeholders including governments, foundations, community development groups, non-governmental organizations and even for profit private firms because of its efficacy to helping reduce the level of extreme poverty among the poor in the rural communities.

The idea of microfinance has been in the system for several centuries. During those periods, a lot of savings and credit groups that have operated for centuries include the "susus" of Ghana, "chit funds" in India, "tandas" in Mexico, "arisan" in Indonesia, "cheetu" just to mention few as well as numerous savings clubs and burial societies found all over the world („The New Vision of Microfinance,2004) . According to the New Vision of Microfinance 2004, available proof points to the fact that, one of the first microcredits in Africa was established in Northern Ghana in 1955 by some Canadian Catholic Missionaries. Susu, which is we commonly associate with microfinance is believed to have come from Nigeria and now a household name in our society spread (The New Vision of Microfinance 2004).

Schreiner and Colombet (2001), microfinance is the attempt to help the poor and the vulnerable gain access to small credit as well as get the opportunity to make deposit or save which they were denied by the traditional banks. Therefore, microfinance involves not only the provision of financial services such as savings, loans but also insurance to poor people living in both urban and rural communities who are denied financial services from the formal financial sector. The providers of microfinance services include Rural Banks, Savings and Loans Companies, Credit Unions, Susu Companies among others.

It also involves lending to clients who do not have required collateral, recognized business accounts or a reputable credit history. Individual collateral is substituted for by group collateral. This makes it possible for people in the catchment areas of Akuapem Rural Bank to access microfinance services provided by the bank.

1.2 Poverty and Vulnerability  incidence in Akuapem North Municipality
Vulnerability in this  scope  is  explained  as  the  diminished  capacity of an individual or group to  forestall,  handle,  fight  and  recover  from the  impact  of a  natural or man-made hazard in relation to physical, economic, social, political, religious and health issues. The 2010 population and housing census disclosed some level of vulnerability in Akuapem North Municipality.

The fact remains that people react differently to risk as a result of the kind of association or group, gender, ethnic background, age, socialization process among others but almost all the people in the municipality are Ghanaian by birth (91.5%) with total migrant population representing 8.5% of the total population which is 136,483. Measures and structures to reduce the  impact of vulnerability such as mitigation, preparedness,  prediction, guiding capacities, local government  and  traditional structures  exist in the  municipality to tackle the root cause of  vulnerability. Most vulnerable  groups  include  persons  with  disability, the aged, children, pregnant and nursing mothers among others.

Poverty like other phenomenon has varying perception and understanding from different people due to its diverse nature and background. Some indicators used in measuring poverty in the municipality include but not limited to epidemics in communities, high rate of social vices, poor sanitation, poor housing conditions or dilapidated houses, unemployment, lack of social amenities among others. Some of the common causes of poverty in the municipality are; poor management of scarce resources, large family size, lack of skills training, low level of education (Akuapem N, 2015). The predominant occupation in the municipality is farming. 50.7 per cent of the population in the municipality is below the poverty line. This means that five (5) out of ten (10) people in the municipality are poor which is slightly higher than the regional figure where three (3) out of ten (10) people are poor, Ghana Population Census (2010).

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Item Type: Ghanaian Topic  |  Size: 56 pages  |  Chapters: 1-5
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