Browsing by Author "Amha, Wolday (PhD)"

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    The Demand for Microcredit Service in the Afar National Regional State - the case of Gewane Woreda
    (Addis Ababa University, 2002-06) Ali, Seifu; Amha, Wolday (PhD)
    Despile Ihe presence of plenty of business opportunities that can be promoted by micro finance inslitutions (MFls) and despite the presence of large unemployed and economically active popllialion in Alar, the development of MFIs has long been conceived as costly and laborious at hest and impractical at worst. Although some small credit schemes around Awash (zone three) hv CARE Awash, Gewane (zone three) by Farm Africa and Afdera and Teru (zone two) by UNICEF - WIBS (United Nations International Children's Emergency Fund - Woreda IlIIegrated Basic Service) program have been undertaken, fitll time fimctioning commercial micro/in(lnce institlltions have not been introduced to the regioll yet. This has hampered the development olmicroellterprises. Economically active people ill the region are kept idle and spend th eir life fin ancially insecure. The primUlJ! ohjective of the study is to show the extent of potential demand for microcredil in Gewane woreda, to indicate the most important household characteristics which dictate the hOllsehold's decision for a given amount of loan, alld to show the presence of plenty of business opportllnities that can be a potential base for the development of sustainable fillancial institutialls. Prilllmy rial({ were collected through cross-sectional survey. Both purposive and systematic /'{fndolll sampling techniques were employed to select woreda, farmers associations (FAs) and hOllseholds. Slmctllred questionnaires and focused group discussions were used to collect prilllaty data. Quantitative and qualitative techniques were used to analyze the data. Major [tnc/iugs of the study shows that in Gewane woreda the livelihood of households is mainly dependent on livestock production. About 70 percent of the sample households are engaged in livestock production. On the average, there are about 6.1 dependents and 3.4 economically ({Clive people ill a household. About 314'" of the households earnl1lonthly income which is below Ihe woreda average (547.61 Bin). Livestock and crop production and urban and rural petty lrades including Gulit, small shopping center, selling of food, local drinks, and chat and the !,rodllclioll ol halldicrafts such as Sifet, Selen, and Gadeta are the major business opportunities in Gel·val/e woreda. Shortage of capital and marketing are the major problems faced by lIIicroenlreprenellrs. Cattle disease, marketing and instability (because of the conjlict with Issa) lire also the main causes to household food insecurity problem. These causes offood deficit may also be potential weakllesses ofGewane woreda to the development of micro finance institution. More thelll 90 percent of Gel·vane woreda households need credit to operate gainful lIIicrobllsilless ({ctivities. Out of these 68.3 percent require a loan amount of 2,000 Birr or less. The stlldy revealed that rural households demand higher amount of loan than urban households. Frolll Ihe lotal salllple survey population, more than 95 percent are willing to pay for the iil/ancial service they would receive. Out of these, 61.8 percent are willing to pay 12.5 percent or lIIore interest for the loan delivered to them. About 314'" of rural and hall of urban households {Ire willillg 10 P({Y the indicated amount of lending interest rate. The analysis using logistic regressioll lIIodel illdicated that age, ethnic group, level of educatioll, /lumber of dependents and nllll/her ol econol/Jical~)I active age people in the household and monthly income of the household head ({re Ihe 1II0st important household characteristics which injluence the decision of the hOllsehold/or a given amount of loan.
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    The Impact of Micro-financing on Poverty Reduction: A Case Study of Oromiya Credit & Saving Share Company (Ocssco) In Eastern Wollega Zone of Oromiya National Regional State, Ethiopia
    (Addis Ababa University, 2003-07) Moti, Daba; Amha, Wolday (PhD)
    The prevalence of poverty has been a common phenomenon in Ethiopia. The prevailing operation of the conventional financial institutions in Ethiopia is inefficient in providing financial services to the poor. The challenge Ethiopia is facing today is to reduce poverty and achieve sustained economic growth for healthy national development. One of the economic policies of the country is introduction of MFIs in the country. Currently, microfinancing is being practiced in the country as a tool to deliver financial services to the poor with the objective of attacking poverty. OCSSCO, one of the 22 licensed microfinance institutions in Ethiopia, was established in August 1997 in ORNS for this purpose. The objective of this study, therefore, is to find out whether the delivery of financial services of the MFI has made changes on living standard of the clients. Primary data were collected through structured questionnaire from clients and non-clients using simple random sampling method. Secondary data were gathered from different MFIs’ reports and literatures. Both are quantitative and qualitative in nature. Descriptive analysis, dichotomous binary model and sensitivity analysis were applied in the study. The impacts are analyzed based on two approaches. First, the impacts are observed in association mainly with income, which in turn have effects on nutritional status, access to education and medical facilities, employment generation, savings and empowerment, among others. The finding indicates that the OCSSCO’s microfinancing scheme has made positive contribution to the clients in relation with observed variables. The impacts are also evaluated based on MFI’s outreach and sustainability having the conceptual framework that if both outreach and sustainability have been enhanced then the program intervention is judged to have a positive impact as it has created the financial market to the poor. The finding also indicates that in spite of improvement in outreach and sustainability, a number of respondents are looking for the services. However, considering the sustainability of the MFI, the result shows 100% loan repayment performance except the first year of establishment in the study area. Adequate advising, supervision and giving services on time are some of the factors that help in loan repayment performance. The overall objective of MFIs in Ethiopia is to increase the productive potential of the poor and poverty reduction. The study found out the importance of the program. The intervention has enabled the clients to generate income that could be spent on better facilities, which could improve the living standard of clients. Therefore, strengthening the existing operation would be appropriate socio-economic policy. KEY WORDS: Microfinance, Loan products, saving products, Impact assessement, Outreach, Sustainability, Poverty.
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    The Impact of Microfinance in Poor Women A case study of Dedebit Credit and Saving Institution (OECSI) in the Eastern Zone of Tigray
    (Addis Ababa University, 2003-11) Areuawi, Tesfaye; Amha, Wolday (PhD)
    In Ethiopia about half of the population (about 44 per cent) live in absolute poverty . Although the causes of poverty and the corresponding measures to be taken in reducing or alleviating poverty are diverse , the importan ce of providing microfinance services to the poor is becoming a major tool allover the less developed countries , including Ethiopia When properly designed . microfinace offers a variety of benefits to the poor people. Foremost, microfinance initia tives can effectively address material poverty , physical deprivation of goods and services through increased income , income diversification , consump tion smoothing. and reduced variability of income. In Ethiopia the delivery of microfinance services has inc reased in a short period of time. This study attempts to address the impact of microfinance services provided by DECSI on poor women and their househo lds. In the case study , there is a marked difference in the loa n size between male and female clients of DECSI. The loan size of urban clients was also sign ificantly greater than rural clients in both men and women. This study shows that directly or indirectly, microfinance services provided by DECS I are contributin g to the sustenance and improvemen t of the life of the poor women and their househo lds although the impact v ar ies . General ly the study shows that microfinance contributes to Increase in income and diversified sources and reduced variability of income. It has also contributed to Increased consumption and improved living condition in terms of house repairs and expansions and medical services . Another contribution of the microfinance services is capital accumulation in the form of increased saving . Finally it con tributed to better position of women in terms im proved attitude and respect of their spouses , increased selfconfidence and self-image On the other hand , microfinance servic es have limited impact on entrepreneurial development and microenterprising. in sustaining and improving microenterprise profitability , requiring beyond credit services by respective stakeholders. T he empirica l evidence also shows Implications for regulatory aspects of the microfinance services such as reviewing loan ceiling and repaymen t terms . It also indicated implications for dive rsifying microfinace produc ts , reducing group sizes and considering lending on individua l bases in widen ing microfinance services to the poor and poorer categories of the society in achieving poverty red uction and in the transition to poverty alleviation and securing de velopment in the country
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    A Structure-Conduct-Performance Analysis of the Ethiopian Microfinance Industry
    (2014-06) Teshome, Beza; Amha, Wolday (PhD)
    The main objectives of this study are to analyze the Structure-Conduct-Performance of the microfinance industry and measure the level of competition. In order to achieve these objectives, both descriptive and econometric analyses were carried out. In the econometric analysis, a three-stage-least-squares (3SLS) estimation method was used to estimate a model comprising two equations, each representing the structure and performance of the industry, for a sample of fifteen MFIs for years 2003 to 2011. From the descriptive analysis, it was found that there is no form of collusion among MFIs in terms of their pricing strategies and that the sector is concentrated, with regional-government backed MFIs dominating the industry. However, competition exists between MFIs and banks in terms of saving mobilization. The findings from the econometric analysis revealed that MFI size, capital structure, average loan size and financial self-sufficiency significantly affect the market share of MFIs. Furthermore, average loan size and cost per borrower were found to significantly affect the performance of MFIs, whereas market share and yield on gross portfolio were found to have an insignificant effect on the financial performance of MFIs. The findings imply that in the microfinance industry, performance of MFIs affects market structure, while the structure of the market has an insignificant effect on market performance