CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Many people in developing countries neither have their own bank accounts nor are they able to take out loans, transfer money or insure their families against risks such as illness, accident or death. In most cases, access to these financial services that are so central to sustainable development are either denied or made very difficult. Consequently, people frequently have no choice but to resort to local moneylenders who charge usurious rates of interest or use informal and, therefore, insecure ways of performing transactions such as payments and money transfer. The above is reflected in the quotation by the past Secretary-General of the United Nations:
‘‘The stark reality is that most people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector. Together, we can and must build inclusive financial sectors that help people improve their lives (United Nations, 1997).’’
With almost thirty per cent of the country's population living in poverty, the Government of Ghana clearly faces an enormous challenge to reduce poverty especially in the three northern savannah regions where there is the greatest concentration of poor people. To achieve rapid and sustainable reduction in poverty, it is necessary to have an integrated policy with the various elements of the strategy reinforcing each other.
The World Development Report for 1990 (World Bank, 1990) found that poverty can be reduced most effectively by a strategy with two equally important elements. The first element is to promote the productive use of the most abundant asset of the poor, labour. Broad-based economic growth through appropriate macroeconomic and microeconomic policies