The Role of Microfinance Institutions on Poverty Reduction and Improving the Living Standard of Poor People: The Case of Lemu and Bilbilo Woreda

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Date

2011-06

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A.A.U

Abstract

Traditionally, poverty was understood primarily as material deprivation, as living with low in come and low consumption characterized by poor nutrition, poor living conditions, low health & education level and inability to attain a minimal standard of living. Reducing, if possible eradicating poverty is unquestionable. Thus, microfinance programs have been considered as one of the main tools in poverty reduction in recent development agenda. It is an important economic input in the effect to reduce poverty by supporting marginalized active poor of the society. Studying the role of microfinance institution on poverty reduction and improving the standard of living is important to assess its viability on poverty reduction and living conditions. The main objective of this study is to find alit whether the provision of microfinance services of MFls in Lemu and Bilbilo has reduced poverty and brought changes all the living standards of clients. So on the light of my research objective; I have developed my research question, which is: What is the role of Microfinance all poverty reduction and uplifiing the living standards of the poor people ill Lemu and Bilbilo? I consider myself between the Positivist and Interpretive researcher. Because, my main goal is not only to find out the mechanism of microfinance in Lemu and bilbilo, but also to find out that how this mechanism reduce poverty and helps poor people to improve their living standards as: income, savings etc. By doing so, I believe that it will give me an upper hand, especially when it comes to finding answers to the questions raised in the problem statement. Primal), data were collected through close-ended structured questionnaire from clients and staff members of each institution and semi-structured in rearview with the manager of each institution. Secondary data were gathered from different published and unpublished relevant materials. The study mainly applied analytical approaches such as frequencies and percentages. The findings of the study indicated that the OCSSCO, PEACE AND BG'S micro financing scheme has improved the clients 'food security, ability to send children to school, and housing condition. Key words: Role, poverty, microfinance, standard of living, poverty reduction.

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Keywords

Poverty Reduction, Microfinance

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