Effects of lending practices of Kakum Rural Bank on the livelihoods of its borrowers

Abstract

The study aimed at assessing the effects of lending practices of Kakum Rural Bank on its borrowers. Both probability and non-probability sampling techniques were used to select a sample of 256 respondents from four agencies of the bank. The main instruments used to collect data were the interview schedule and the questionnaire. Descriptive statistics and SPSS software were used to analyse the data. The results were presented in charts and frequency tables.The results disclosed that: it was difficult for credit recipients to raise a group that was jointly liable and credit worthy to serve as social collateral; recruitment of additional labour was difficult; the bank’s lending operations were generally perceived as satisfactory; there was an increase in recipients’ financial status, production and output levels; recipients were able to contribute towards social activities in their communities and provide household needs promptly.It is recommended that the bank should disburse more credit on time, when the assessment of clients’ project viability and credit repayment records is good. Clients should use the credit judiciously and follow the bank’s instructions in order to enhance their livelihoods and promote additional labour recruitment.