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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Date
2010-06
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Addis Ababa University
Abstract
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
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Keywords
Urban Poverty alleviation, Micro finance institution