Type | Journal Article - International Journal of Interdisciplinary Research |
Title | Poverty reduction through micro finance? Evidence from Ethiopia |
Author(s) | |
Volume | 1 |
Issue | 6 |
Publication (Day/Month/Year) | 2014 |
Abstract | Micro finance being practiced in many developing countries to address the low income society and thereby to improve their livelihood. Ethiopia is also one of the countries where microfinance has been given due consideration as a safety net for the poor to help them to overcome the adversities of poverty. There is a wider agreement about the goal of micro finance that is to improve the welfare of the poor through enabling them to participate in income generating activities, empowering women, creating employment opportunity etc. But this has not led to wide agreement how best to achieve those objectives in practice. Hence, this paper is interested to explore the practical impact of micro finance programs on urban poverty alleviation in Shashemene town, Ethiopia. To address the objectives of the study, both primary and secondary data have been used. Primary data was collected from 210 sample clients selected from three MFIs namely SEYAMFI, Busa Gonofa and Wisdom by proportionate random sampling technique. Secondary data was obtained from the selected MFIs. The collected data ware analysed using SPSS (20 Version). Simple analytical tools such as percentages, averages and frequencies were used to arrive the results. The results are presented in tables, charts and graphs for easy understanding. The findings show that there is a positive and promising outcome in the areas of credit operations (types, terms, conditions), saving mobilization (type and magnitude), credit utilization and changing the living standard of the borrowers. On the other hand, the program has its own shortcomings in the areas such as; outreaching the targeted urban poor, practicing group lending methodology, lending interest rate, creating employment opportunities, training and promotion to encourage the urban poor to participate in the program. Based on the findings, suitable recommendations are forwarded to improve the microfinance activities in the study area. |
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