Microcredit to Rural Women, Intra-household Power Play and Employment Creation in Northern Ghana

Abstract

In line with previous studies, this article seeks to extend the frontiers of impact of microcredit to employment creation. The article argues that accessing microcredit and employment of additional hand(s) are preceded by two interrelated decisions. In view of this, the study tests the hypothesis that the decision to access microcredit has a positive impact on the decision to create employment. In furtherance of the above, the study uses data collected from 500 women from northern Ghana in a household survey, of whom 250 are beneficiaries of microcredit. The bivariate probit selection estimation technique is employed and the results indicate that access to microcredit has 46 per cent probability of employment creation. Respondents from the Builsa district are more likely to access microcredit and also employ additional hand(s) than their counterparts from the Talensi and Bongo districts. Also, intra-household power play has a positive impact on access to microcredit and employment creation. It is, therefore, recommended that microfinance institutions desirous of employment creation need to increase access to microcredit in the rural areas both in breadth and depth, particularly credit for production activities. Also, a healthy intra-household power play needs to be encouraged by development practitioners to positively influence female-owned businesses. JEL: D1, G21, J2