UMass Amherst Department of Economics PhD student Theresa Owusu-Danso is the recipient of two fellowships, a dissertation fellowship awarded by the African Economic Research Consortium (AERC) and an international fellowship awarded by the American Association of University Women (AAUW). Owusu-Danso’s dissertation is titled, “Microfinance, Household Indebtedness and Gender Inequality” and the awards from the AERC and AAUW will support her field work which involves a survey of households and microfinance institutions (MFIs) in Ghana during April-June, 2013.
Owusu-Danso’s key research objectives include examining the impact of access to credit from MFIs on poor households’ balance sheet; investigating whether MFI credit (its conditions and use) may contribute to households’ financial distress; assessing the impact of access to microcredit on intra-household inequality, specifically how men and women are affected differently by their access to credit from MFIs; and ascertaining factors influencing the high repayments of loans contracted from MFIs and how these relate to household productivity.
Owusu-Danso’s research is highly relevant for economic development policy in Ghana (and in other African countries as well) where a critical challenge to poverty reduction and gender equity is lack of access to finance. Her study makes a unique contribution to the literature in this area by investigating whether access to credit from MFIs may actually cause a financial burden on the poor households and therefore worsen, rather than improve, their well-being. Most of the research in this area has primarily focused on access to credit by the poor and by women. Her study is pertinent given the fact that MFI loans are generally much more expensive (higher interest rates) than loans from banks. Thus, MFI credit may not necessarily be an unmitigated blessing for the poor and for women. Owusu-Danso’s research will shed light on this important question.