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as been described in many ways. Most often, poverty is a situation people want to escape. So poverty is a call to action for the poor, wealthy, organizations, agencies, governments and the international community alike; it is a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities” (World Bank; 2006: 2).

Despite various attempts by Governments, Donors and other Development programs to handle and reduce poverty, this problem has significantly increased in the past decade with approximately 50% of the sub-Saharan Africa living below the poverty line, defined as subsisting on less than 1 US dollar a day. At the national level of many African countries therefore, poverty is a crisis that will require the concerted efforts of different actors. Among the poor persons, women are more vulnerable to poverty than men. For instance, over 68 per cent of the active female population in Africa work as subsistence farmers and hawkers compared to 32 per cent of men (Rose Mwaniki; 2006:4).

It is against this back drop that in assumption of office by the current NPP government, a declaration of the “Golden Age of Business” was made with the private sector identified to be the main engine of growth. A major blueprint dubbed Ghana Poverty Reduction Strategy (GPRS I) was launched under which the major strategies to be adopted were outlined. This coupled with the HIPC initiative in 2001 gave more meaning to government’s quest of reducing poverty since the county’s external debt servicing were withheld hence being in the position to make credit available to small and medium scale enterprises (Ghanaian Times, 13th March, 2003).

In addition, the prudent management of the national economy saw a major stability in the economy thereby reducing interest rate and making the financial sector more lucrative for both domestic and external investors. This brought on board many micro financing institutions whose aim were to be in touch with operators of small and medium scale enterprises (SMEs).

It is also believe that small and medium scale enterprises (SMEs) constitute about 90 percent of all businesses in the country (Daily Graphic 10th Feb.2007 p.3). Dr. Paul Aquah, governor of bank of Ghana in an address to a group of businessmen acknowledged that SMEs have the potential to contribute significantly to employment generation. A move has also been initiated by parliament to see to the passage into law two set of bills: credit reporting bill and the borrowers and lenders bill. This is meant to increase credit to the private sector.

Overall, this research is meant to demonstrate that micro finance in Ghana has a major role of reducing poverty among its participating clients, their direct and indirect dependants and the communities in which they operate in general. Access to financial services protects and empowers the poor by mitigating them from risks and giving them choices. The micro finance industry therefore requires support from all relevant stakeholders. In particular, African Governments will need to create a supportive and favorable environment (legal, socio-economic, political and fiscal) that will promote the development of the micro finance industry.

1.1.1 The Research Problem

With the rising spate of un