The Impact of Microfinance in Poor Women A case study of Dedebit Credit and Saving Institution (OECSI) in the Eastern Zone of Tigray
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Date
2003-11
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Addis Ababa University
Abstract
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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Keywords
Oedebit Credit Saving