|Title:||THE IMPACT OF MICROFINANCE IN ETHIOPIA The Case of DECSI in Ganta-Afeshum Woreda of Eastern Tigray|
|???metadata.dc.contributor.*???:||Wolday Amha (Ph.D)|
|Abstract:||In recent years the growth and expansion of microfinance programs and increasing attention to microfinance as a poverty reduction strategy have given rise to a number of questions. What impacts occur at the household, enterprise/farm and individual levels? Are the impacts positive or negative? Do the impacts vary among different sub-groups of clients? These questions were addressed in this cross sectional impact assessment survey of DECSI’s microfinancing scheme in Tigray. The findings have implications for understanding the context in which microfinance programs operate and the impact of microfinances on the clients’ welfare and business stability in Ethiopia and elsewhere. The main objective of the assessment is to determine the nature, extent and distribution of impacts from participation in DECSI’s microfinancing scheme. the secondary objectives are to better understand the general environment of the country on which the microfinance institutions are operating and to understand the role of microfinancing services on the household economy. The overall impact assessment includes the collection of survey data from frequent clients of the program and a new clients comparison in the study area (Ganta-Afeshum Woreda of Eastern Tigray).the evaluation is driven by a set of impact hypotheses which were derived from the USAID’s AIMS project conceptual framework with some modifications to consider the situation of the study area. The survey data are supplemented by qualitative information from focus groups. The survey included a total of 216 respondents of which 109 are frequent clients (experiment groups) and 107 were new clients (control groups). A two stage sample selection approach was used: 1) two settlement areas (urban and rural areas) were selected in the first stage. 2) Control and experiment groups were randomly selected from both the rural and urban settlement areas in the second stage. The survey reveals that both the frequent and new clients are similar in most of the individual and household characteristics. With regard to the impact result, the survey result suggests that, DECSI’s microfinancing scheme appears to have a positive impact on the clients overall household income, sources of household income, acquisition of key household assets, housing improvement, access to education, and access to health facilities. However, the survey ix findings did not strongly evidenced regarding some of the impact variables such as women empowerment, food security, and coping with difficulties. Besides, the magnitude and type of impact varies among different groups of the survey respondents. That is the impact of the program is better in the urban program areas than in the rural program areas except for clients empowerment, which the rural clients have shown better involvement in the household and business decision making activities and participation in any associations or groups in the community. Overall, microfinance makes a difference. The use of financial services by low income households is associated with improvement with the value of the impact variables. However, there is much variability in the nature and magnitude of the impact, which is mainly due to the influence of the macro environment, financial products and terms of the institution (DECSI), regulatory environment of the country, and other social and economic factors. Therefore, to bring about sustainable development and to reduce poverty in the country, more practical and sound policy should be formulated in order to improve the impact magnitude of the microfinance industry. Moreover, all development stakeholders should work together with the microfinance programs, since it is only through working together that we can tackle the development challenges of Ethiopia.|
|Appears in Collections:||Center for Regional and Local Development Studies|
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