Mr. Francis Dompae holds an MPhil. in Social Work from the University of Ghana. He also holds a BA. in Integrated Development Studies from the University for Development Studies (UDS) in Tamale.

PHD TOPIC: ACCESS AND USE OF MICROFINANCE IN SMALLHOLDER FOOD CROP FARMING IN GHANA.

Studies have shown that there is a correlation between financial development and poverty alleviation. Agriculture is often referred to as the most difficult sector to lend to because lenders’ understanding of the business is often limited, compounding the problem of asymmetric information and lending decisions. Recent studies in Ghana suggest that whilst managers of microfinance institutions (MFIs) refer to high default as the main reason they do not support agricultural lending, empirical data does not support their assertion which is a prejudice likely to affect farmers’ access to credit. It has also been reported that the use of loans for agriculture significantly exceeds the official reported share of loans designated for agriculture in Ghana, thus bringing up a contradiction that needs probing. Currently, financial sustainability and profit maximization dominate the objectives of MFIs. These have shifted attention from the core poor who are often smallholder food crop farmers to the less poor who are often engaged in commercial activities because of the latter’s presumed ability to honour repayment schedules. In rare cases of lending to smallholder farmers, MFIs interlace their loans with financial risk mitigation methodologies which have the tendency to restrict access and use. Yet it has been observed that small scale farms in Africa especially are inefficient due to the limited size and technology use, raising concerns about output and profitability when credit is used. Using the forgone observations as the premise, this study seeks to investigate the access and use of microcredit and the extent to which they increase the output and profitability of smallholder food crop farmers using neoclassical economic theory of production and rational choice theory.  This study is expected to, among others, contribute to enhancing understanding of the farm investment behaviour and practices of smallholder farmers in Ghana.