How Relevant is Microfinance to Sustainable Rural Livelihoods? A Case Study of the Zuuri Farmers in Northern Ghana

This paper describes the effect of microloans on the Zuuri farmers in Ghana. It describes how microfinance interventions by the Zuuri Organic Vegetable Farmers Association (ZOVFA) have affected people’s livelihoods by linking microfinance outcomes to their level of vulnerability and capital endowment.

The vulnerability context of the Zuuri farmers can be broken down into:

• Structural factors, such as seasonal variations, soil fragility and inflation;
• Unanticipated crises and emergencies;
• Lifecycle events like marriages, childbirth, funerals and education.

The paper stresses the need to apply multiple strategies of empowerment and asset creation to ensure sustainable livelihoods. Study findings include:

• Farmers were able to store and transport produce and double earnings after the introduction of ZOVFA’s loan and credit scheme;
• Ability to store and transport produce had a direct impact on financial capital and reduced their vulnerability to life cycle events, unanticipated crises and emergencies;
• Provision of technical training alongside credit facilities helped farmers achieve better yields and ensured they stored grains for the dry season;
• Storage of grains for the dry season had an impact on human capital, and reduced vulnerability to seasonal variations.