The Expenditure pattern of microfinance clients of Sinapi Aba Trust in Ghana

The much publicised success of some microfinance institutions and their swift expansion in recent years Suggest microfinance could be a potential policy tool in poverty alleviation. Available empirical evidence from existing research shows some positive impacts made in poverty alleviation from some microfinance programmes. This paper intends to add to the existing literature on the industry by evaluating the expenditure pattern of clients who have received loans from the Sinapi Aba Trust, a Ghanaian microfinance institution. We collected data on clients of the scheme. Our data show that expenditure pattern of old clients is greater than that of new clients, even though the latter on average receive larger volumes of credit. In this study, we construct expenditure indicators, finding that years of membership duration with the SAT lending scheme matters in clients' expenditure. The results show that old clients are more likely to purchase assets and spend on food, expand their businesses, and spend larger amounts on their children's education than new clients.