Does Microcredit Create Employment For the Poor? The Case of the Microcredit Scheme of Upper Manya Krobo Rural Bank in Ghana
Emmanuel KT*, Godfred Frempong, Nelson Obirih-Opareh and Omari Rose
Science and Technology Policy Research Institute, Ghana
- *Corresponding Author:
- Emmanuel KT
Research Scientist, Science and Technology Policy Research Institute
Box CT. 519 Accra, Ghana
E-mail: [email protected], [email protected]
Received date: September 03, 2015 Accepted date: September 24, 2015 Published date: October 01, 2015
Citation: Emmanuel KT, Frempong G, Obirih-Opareh N, Rose O (2015) Does Microcredit Create Employment For the Poor? The Case of the Microcredit Scheme of Upper Manya Krobo Rural Bank in Ghana. Bus Eco J 7:190. doi: 10.4172/2151- 6219.1000190
Copyright: © 2015 Emmanuel KT, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
The microfinance industry, over the past four decades has grown to become a major development tool of the world, both in terms of beneficiaries as well as the financial inputs that it received. The microfinance concept assumes that, ceteris paribus, credit to the poor, would lead to increased jobs, household well-being and poverty reduction. However, to date, no study has established a link between microcredit and wage employment, which is critical for poverty reduction. This paper argues that microcredit is critical for survivalist self-employment but it does not necessily lead to the creation of wage employment for the jobless. This evidence is from an assessment of how microcredit has contributed to business performance of the clients of the Upper Manya Krobo Rural Bank’s microcredit programme in the Eastern Region of Ghana. The paper is based on a doctoral research output that used mixed method approach to collect data from a sample of 420 exits, repeated and permanent microcredit clients. The paper is of the view that microcredit may not lead to paid employment but can help clients start, improve and expand micro-enterprises. Enterprise expansion in this context refers to adding other products/services similar to the existing activity rather than the clients establishing new employable wage enterprises for the jobless.