This chapter examines the role of microfinance in the transformation of rural communities in Ghana. To achieve this aim, a synthesized review of existing literature on microfinance outcomes on employment creation, poverty reduction, female empowerment, and microenterprise development in Ghana was conducted. The review shows that microfinance has contributed significantly to the transformation of rural communities in Ghana by helping to reduce poverty and improving the living standards of the poor. The review also demonstrates that microfinance contributed positively to the socio-economic well-being of women in Ghana. Microfinance has also played a positive role in the transformation of rural communities in Ghana by providing credit to support microenterprise projects. Furthermore, the analysis shows that microfinance contributed positively to the transformation of rural communities in Ghana by providing credit to individuals and microenterprises to create jobs and improve living standards.

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This chapter critically examines how microfinance has been used to reduce poverty rates in developing economies. To achieve this goal, a critical review of existing literature on microfinance outcomes on reducing poverty in developing countries was carried out. Based on the review of literature, this chapter concludes that microfinance positively impact poverty levels in developing countries. However, the chapter also shows that access to microfinance may contribute to higher poverty rates as some studies have produced marginal or negative success, while others yielded positive successes, making it very difficult to generalise the outcomes. The growing popularity of microfinance as a financial inclusion strategy and the high number of empirical studies on the subject have produced new evidence that needs further examination with complex research methodologies to determine its impact on poverty reduction, as outcomes of the current studies are mixed.

This chapter applies the control group experiment to study whether microfinance improved microbusiness growth in Ghana. According to this approach, statistically significant difference in the outcome between treatment and control groups is an indication of impact of the microcredit on microbusiness development. Thus, this chapter compares the mean monthly sales, number of employees, business assets, and capital stock of microbusinesses that received microfinance (the treatment group) and the mean monthly sales, number of employees, business assets, and capital stock of microbusinesses that did not receive microfinance (the non-treatment group) in seven municipalities identified by various non-governmental organisations as areas of financial exclusion in the Northern Region of Ghana using survey data. Results indicate that microfinance impacted positively on microbusiness development. These findings have policy implications for the government of Ghana and agencies that are interested in using microfinance as a catalyst for economic growth in deprived communities in other countries.

This chapter examined the factors that affect the use of microfinance for microbusiness development in Ghana. The study employed semi-structured survey questionnaire to determine whether an entrepreneur's personal attributes impede or facilitate microbusiness development in Ghana. Multiple linear regression analysis was conducted to determine the effects of entrepreneur's personal attributes on the monthly sales, number of employees, business assets, and capital stock of microbusinesses that received credit from a microfinance provider in the northern region of Ghana. The findings of the study suggest that micro-entrepreneur prior work experience, occupation, and prior income facilitate the use of microfinance for microbusiness development. These findings have policy implications for the government of Ghana and other agencies that are interested in using microfinance as a catalyst for economic growth in deprived communities in the country.