THE IMPACT OF MICRO FINANCE INSTITUTIONS ON POVERTY ALLEVIATION: A CASE STUDY OF BAWKU MUNICIPALITY

The purpose of this study was to examine the impact of micro finance institutions on poverty alleviation in the Bawku Municipality. The aim of the literature review was to analyse critically the existing knowledge on the impact of micro finance institutions on poverty alleviation.Qualitative research method was used employed in the study. Case study design was used. Purposive sampling technique was used to select twelve (12) community members from twelve different households in the Bawku Municipality. Data were analysed manually through capturing the patterns and direct words of the participants that were interviewed. The findings were: corruption from government officials prevents communities from taking certain rightful and supportive projects that will alleviate poverty, lack of education contribute to poverty among community people. The general causes of poverty include lack of jobs, laziness and illiteracy, irregular rainfall pattern, inadequate or lack of microcredit facilities,bad road networks for farming and business and failure to appreciate entrepreneurship skills. Microfinance institutions do provide people with loans especially women on friendly payment terms. The challenges faced by Microfinance institutions include: borrowing terms and conditions are unfriendly to the municipality people, they demand collateral security and they have high interest rates. It is recommended that mechanisms should be put in all government and municipal organisations to ensure money and funds meant for communities are properly spent.Education and entrepreneurial skills training should be taken to the door step of the communities. More micro fiancé institutions must be set in the communities to grant short loans to the people. Microfinance institutions must make their borrowing terms and conditions friendly to the municipality people, they must not demand for collateral security and they should have low interest rate.