The Impact of Microfinance on Urban Poverty Reduction. The Case of Addis Credit and Saving Institution (ADCSl).

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Addis Ababa University


The main objective of the study is to evaluate the contribution of AdCSI towards poverty reduction and job creation. The study was conducted on a ll of the branches of AdCSI emplO\ ing the '·b efore" and "afte r" method so a s to evaluate the impact of the microfinance institution on reducing poverty level of its clients. Prima ry data was collected using structured inte rview, FGD, and observational check list while secondary data was obtained from the reco rds of the in stitution, journals, proceedings, bulletins , internet and various books. Both desc riptive and infe rential stati stics such as mean , percentages, Wilcoxon signed rank s test and independent two sa mples ttest was employed. Multi s tage sampling method was employed to take a sample of cl ients from the total population. The saving amount of the res pondents' has increased after participating in the program with d ifference in mean saving between the male and female clients. All of the socio-economic variables have s hown a signifi cant increment after program participation. And there was no sign ificant difference between both sexes regarding the socio-economic variables except for the level of in come after loan. Accord ing to the study 96.1 "!t, of the mature cl ients witncssed increase in income levels . The average monthly income of the male clients increased from 918.6 to 2157.1 ETB and the fem a les' increased from 8 14.8 to 1834.8 ETB a fter program participation. The reasons for positive change in income of the benefi ciaries were: through the loan they were a ble fin a nce productive capital assets and finance the working capital of the bus iness . The re fore , the credit help ed th em to open a n (w business, expa nd the existing and dive rsify sources of income. According to the study 64.1 % of the sample benefic iaries purchased productive assets due to access of loan and 79.2% reported that their households' over a ll d iet condition has improved a fter program p a rticipation and only 77.5% of the clients could afford to medical expend itures of th eir families before program participation but the number increased to 99.2% a fter the in tervention. Thus , seeing the positive effect of the cred it program on the bene ficiaries' socio-eco n omic conditions, it can be said th a t the institution is on the right track to achieve its ultimate objective of poverty reduction .



Microfinance on Urban Poverty Reduction