The Impacts of Microfinance Institution on Household’s Livelihood; The Case of Oromia Credit and Saving Share Company and Busa Gonofa Micro Finance Institution of Jeldu Woreda.

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The prevalence of poverty has been a common phenomenon in Ethiopia. Microfinance has been introduced and currently it is being practiced in the country as a tool to deliver financial service to the poor with the objective of reducing poverty and improve household livelihood. This paper examines the impacts of microfinance on household livelihood in Jeldu district, Oromia regional state. The study uses cross-sectional data collected from Jeldu woreda households to derive the empirical evidence. Propensity score matching was used for identify the impacts of microfinance intervention on improving the living standard of poor household in comparing client and nonclient household. In this scenario, this paper found that credit has a significant and positive impacts on household average yearly income, consumption, Education, health care, employment generations and housing condition in comparing with non-client respondents. These findings confirm that credit provided for rural household is an effective policy tool to reduce poverty. Therefore, strengthening the existing operation of microfinance in the region would be appropriate socio-economic policy



Average treatment effect on Treated, Micro finance, Poverty, Propensity score matching