The thesis empirically examines how microfinance products are designed and
implemented, and the implications for clients’ households and sources of
livelihood. The study argues that the design of products and implementation
that reflect the livelihood needs and poverty context of clients is one of the
effective ways to reduce poverty. It investigates the microfinance operations of
three financial institutions: Sinapi Aba Trust (SAT), St Joseph’s Cooperative
Credit Union (CCU) and Sonzele Rural Bank (SRB) in Jirapa, a municipality in
Northern Ghana. The study deployed a mixed-methods approach to collect data
from six rural and urban communities. Data was sought from secondary
sources, 20 interviews, 10 focus group discussions and 120 questionnaires.
The research adopted the Sustainable Livelihoods and the Making Markets
Work for the Poor approaches as a guide in the framework of analysis. The
study, using qualitative and quantitative analytical tools found that product
designs of SAT and SRB did not reflect the needs and poverty context of the
majority of their clients. Clients of SAT and SRB were found to be less involved
in the product design processes, suggesting a top-down institutional approach
that seldom incorporated the needs of the poor. The method of group formation
has a substantial implication on members’ poverty outcomes. Groups involving
only females had a significant and positive relationship with members’
household and business outcomes, while members of male-only groups had a
negative relationship with their household outcomes. The thesis concludes that
accessible interest on loans and incentives to encourage savings would make
microfinance markets work more sustainably for the rural poor. The findings
challenge a reconsideration of the design of microfinance products to integrate
financial technology as an efficient approach to deliver financial services,
especially in rural areas
