Rural Banking and Administration

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RURAL BANKING AND ADMINISTRATION OF MICROFINANCE TO SMALL AND MEDIUM ENTERPRISES
CHAPTER TWO
2.0 LITERATURE REVIEW
This chapter seeks to review available literature on microfinance, the Small and Medium Enterprises (SMEs) and Rural Banking in Ghana. It lays much emphasis on the research questions and objectives of this study. 2.1 The Concept of Microfinance
Microfinance has been a great development strategy for successive governments in Ghana and other developing countries. The much emphasis on the introduction and development of the microfinance sector is attributed to the important role it plays in the reduction of poverty and employment creation to ensure a high standard of living in developing countries. Microfinance is a monetary service provided by formal and informal institutions in small amount to the vulnerable and excluded (Sarkar and Dhar, 2011:8). Robinson (2001:9) defined microfinance as a means of smaller units of credit and savings to people in agriculture and entrepreneurial activities. This definition demonstrates the dominance of microfinance institutions in the rural areas of most developing countries. Microfinance is also considered as a development tool aimed at empowering individuals to use their capacities for self development (Edegbe, 2013:35).
The definitions of microfinance in literature show that it is a means of taking financial resources to the poor through the establishment of flexible institutions. From the definitions, microfinance is an
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