Microfinance And Improvement In Living Standards: A Pathway Out of Poverty (The Case of Enemay Woreda, Eastern Gojjam, Amhara Regional State)
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Date
2004-07
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Addis Ababauniversity
Abstract
Since the 1970s there has been a strongly growing interest in considering micro financing as
a viable strategy for the poor. Especially after the success of the Grameen Bank, the system
has been duplicated in the different parts of the developing world. Ethiopia is also one of the
countries where micro finance has been given due consideration as a safety net for the poor to
help them overcome the adversities of poverty.
Microfinance institutions, as mentioned above, are basically set up with the goal of poverty
reduction. Hence, the situation whether the objective of these MFls is met merits special
consideration by way of impact assessment. Although several studies have been conducted so
far, the impact of micro finance on poverty reduction still remains an issue to be addressed.
This study tries to answer three important questions: how well ACSI has been working
regarding repayment and outreach; what welfare difference ACSI has brought on the clients
and what opinion the clients have regarding the services provided by ACSl.
With the above objectives in mind, the research work employed questionnaires (developed by
UNSAID's AIMS Project), key informants; focus group discussions, and observations to
obtain primary data. In addition, secondary sources of data have also been used. Eventually,
using a mix of qualitative and quantitative tools(such as logit model), the study found out that
ACSI has brought positive impacts in income, consumption, asset building( in urban areas in
particular) and decision making in household activities. However, much is to be done in
incorporating more females in the program and in devising strategies in such a way that
clients would look for other alternative income generating ventures, other than, for example,
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buying ox and sheep in rural areas and cereals trading in urban areas of Enemay,Woreda. In
addition, loan size ought to be considered in addition to providing the poor with trainings
and technical backup.
Key Terms: Poverty, poverty reduction, microfinance, ACSI, impact, Enemay Woreda
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Living Standards: A Pathway Out of Poverty