An Assessment of the Role of Micro Finance Institution In Urban Poverty Alleviation: (The Case of Addis Credit and Saving Institution in Kirkos Sub City)

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Addis Ababa University


Poverty is a critical problem of all countries in the world regardless of their level of development. The whole purpose of development and Development Studies is to fight against poverty and reducing both urban and rural poverty in the world to the possible minimum level through different interventions. Microfinance is considered as one of the major interventions in poverty alleviation all over the world. Therefore, it is vital to evaluate the role microfinance programs play in urban poverty alleviation. The prevailing operation of the conventional financial institutions in Ethiopia is inefficient in providing financial services to the poor. The challenge that is facing today is to reduce poverty. Microfinance is being practiced in the country as a tool to deliver financial services for reducing poverty. In order to investigate the fundamental premise, this study examined empirical evidence in Addis credit and saving institution to know its contribution to poverty reduction. Therefore, the objective of this study is to find out whether delivery of financial services of the MFI to urban poor in the contribution of towards poverty alleviation. Primary data were collected through questionnaire administered to clients of AdCSI using systematic random sampling technique. Secondary data were gathered from different literatures and MFIs’ reports. The research is both quantitative and qualitative in nature. Descriptive analysis was applied in the study. The contribution of microfinance is analyzed based mainly on income which in turn has effects on nutritional status, education fee, medical facilities, employment generation, and empowerment among others. The finding indicates that AdCSI scheme has made positive contribution to the clients in relation with observed variables. Though the result also implies that AdCSI gives priority to women clients on the provision of financial services; loan disbursement of men is higher than loan disbursement of women. Besides, significant number of borrowers can not afford expenses on education, clothing they have no income generating mechanism before joining in the institution among others. Therefore, strengthening the existing operation with other support means of income generating mechanism would be appropriate to address the problem of urban poor



Urban Poverty alleviation, Micro finance institution