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29.10.2008 Social News

Barriers still exist in accessing credit – Research

By gna

A research finding on Micro-Finance Services for rural women has revealed several barriers, including high interest rates, lack of financial education and demand for collaterals in sourcing such facilities.

This has contributed to women micro-entrepreneurs not sourcing loans for the expansion of their businesses.

Dr. Irene S. Egyir, consultant and lead researcher at a sensitisation workshop for members of the Christian Mothers Association (CMA) on Wednesday, said though women's participation in productive sectors, was significant they lacked access to micro-financing, making it difficult for them to play their roles effectively.

She said the research, which was funded by the Business Sector Advocacy Challenge (BUSAC) Fund in response to the call for change in the micro-finance sub-sector, was aimed at promoting easier lending access to rural women micro- entrepreneurs.

Dr Egyir said it was the core objective of the study to document the current situation of barriers to access of micro finance to rural women entrepreneurs and activities of Micro-Finance Institutions (MFI) to form the basis of an advocacy action to bring about the desired change.

She also urged MFIs to create a level of working environment which would attract more rural women, as most women lacked the courage to even enter a banking hall to attempt to transact any business.

“The barriers to loan acquisition was creating a major gap between females and their male counterparts in the business sector, leading to the current low status of rural women.”

Mrs Egyir said this had become an impediment in attaining national growth and poverty reduction among majority of Ghanaian women, thereby reducing the chances of Ghana attaining the Millennium Development Goals.

She said the research indicated that though most financial institutions had embraced the challenge of assisting micro businesses, females continued to receive less access to such credits.

Mrs Egyir attributed this handicap of women micro-entrepreneurs to high illiteracy levels among rural women and poor credit history as well as negative attitudes towards credits.

She said micro-credits had played positive roles in the livelihood of many rural women and their families over the years. The reduction of interest rates on micro loans by MFIs, financial education and removal of collaterals would therefore encourage many women to patronise the facility.

Dr Egyri called for better collaboration and understanding between micro-lenders and micro borrowers, reduction in loan processing fees, processing times and introduction of longer repayment periods.

Mrs Christine Abavana, Director, Legal Services, Ghana Cocoa Board advised women entrepreneurs to practice good record keeping, monitor their business trends and cash flows as well as interests to enable them to secure more loans to expand.

She also advocated good practice in loan repayments and urged women creditors to be truthful in their dealings with the banks to enable others to benefit from the loan facility.