The impact of women groundnut farmers’ participation in Village Savings and Loans Association (VSLA) in Northern Ghana

Ghana is currently experiencing stagnant agricultural growth as a result of significant differences between actual and potential crop productivity. Village Savings and Loans Associations (VSLAs) are essential in bringing financial services to rural areas where access is scarce. The study investigates smallholder women groundnut farmers’ participation in Village Savings and Loans Association (VSLA) programme and its impact on farm productivity and income in Northern Ghana. The data was collected from 384 smallholder women groundnut farmers using multistage sampling technique and analyzed using descriptive statistics, Endogenous switching regression (ESR), Propensity Score Matching (PSM) and Kendall’s Coefficient of Concordance. The findings of the ESR showed that membership of Farmer Based Organization (FBO), radio ownership and dependency ratio positively influenced the probability of women groundnut farmers’ participation in the VSLA programme. However, extension services, years of living in the community, groundnut farming experience, farm size and input cost have negative influence on women farmers’ participation in the VSLA programme. In addition, the results of the ESR and PSM showed that VSLA programme participation significantly increased participants’ farm productivity and income. The small amount of available loans and short-term loan period were major challenges faced by the VSLA programmes and these limited investments in long-term activities. The study therefore suggests that VSLAs should tailor their savings and lending modalities to the needs of the farmers. To overcome the delivery challenges of VSLA credit, women groundnut farmers should use part of their loans from the VSLA programme to start off-farm income generating activities.