Synthesis of Microfinance and Technical Efficiency: Implications for Poverty Reduction in Ghana

Abstract

This paper uses field survey data to assess the mechanism through which microfinance can
reduce poverty among rural households in the Upper East Region of Ghana. Data was
collected from 500 women engaged in agro processing of whom 250 were beneficiaries of
microfinance. The results from the Ordinary Least Square estimation reveal that an increase
in technical efficiency of microfinance beneficiary has a positive impact on poverty reduction.
In this regard, microfinance institutions are edged to incorporate training and business
advisory services as part of their service delivery so as to make their clients more technically
efficient.