Abstract:
Microfinance Institution is a very important tool for Poverty reduction, Employment creation, and Economic Development in Ghana and most parts of the world. It targets the low-income individuals who are mostly in the rural communities through innovative products such as savings, microloans and lending in groups. The entire financial system has a challenge and so micro-finance is not an exception. This article investigates the challenges that microfinance institutions faced in trying to reduce poverty and create employment for the poor. Primary and Secondary sources of data were used. With the Primary data, interviews were conducted. The data were collected through interview guides and questionnaires with some selected microfinance management and customers. The respondents were purposively selected to respond to the questions. With secondary data, relevant related literature was reviewed to bring out the important issues on this subject matter. The results were analyzed using Statistical Packages for Social Sciences. The researcher found out that, some of the challenges micro-finance institutions faced are: Poor regulation and supervision, inadequate knowledge and skills and panic withdrawals. Again, the results revealed that Microfinance Institutions have a strong positive impact on poverty reduction and employment creation in the country.
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