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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Addis Ababa University


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



Oedebit Credit Saving