Impact of Group Lending on the Living Conditions of Women in Addis Ababa: A Case Study of Women under Three Micro Credit Agencies
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Date
2005-07
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A.A.U
Abstract
In Ethiopia about half of the population is living under poverty. Due to the existence of many
discriminating practices such as gender-based division of labor, lack of access and control
over resources women comprise a majority of those living in absolute poverty. This expression
is emanated from the fact that women's subordinate position in the country measured in terms
of all main indicators such as access and achievement in education, health condition,
economic equity, legal status and women empowerment.
Micro credit program is currently being promoted as a key strategy for simultaneously
addressing both poverty alleviation and women's empowerment. Accordingly, this study
focuses first whether the scheme actually does improve women's living conditions measured in
terms of increase in income, saving, consumption expenditure and diet, educational
attainment, asset formation, housing or repair and women empowerment based on 140 sample
women beneficiaries under ADCSI, Gasha and A VFS
The results of the study indicate that the credit scheme has brought positive impact on
improvement of living conditions measured by the positive change in all variables except on
the variables such as access to education and health care.
However, for micro finance activity to be sustainable it must have better repayment
performance and accordingly the study focuses secondly on the repayment determinants of the
beneficiaries.
The determinant of loan repayment performance as estimated by the binomial probit model
indicates that age, educational level, total expenditure, group size, group relation, group
formation, loan rationing, suitability of loan repayment period and loan amount are related
negatively while number of dependent, frequency of loan, total business income, total off business
income, asset holding and loan supervision are related positively with loan repayment
performance. Hence, these repayment enhancing factors and variables that affect repayment
performance negatively should be considered by MFls in designing a more effective loan
repayment mechanisms.
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Impact of Group Lending on the Living Conditions of Women in Addis Ababa