Impact of Microfinance on Poverty Reduction in Ethiopia: The Cases of Three Branches of Specialized Financial and Promotional Institution (SFPI)

Abebe, Tiruneh (2006) Impact of Microfinance on Poverty Reduction in Ethiopia: The Cases of Three Branches of Specialized Financial and Promotional Institution (SFPI). Masters thesis, Addis Ababa University.

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Poverty is a harsh and undesired phenomenon in mankind. Reducing, if possible eradicating poverty is unquestionable. Thus, microfinance programs have been considered as one of the main instruments in poverty reduction in recent development agenda. It is a means to support the marginalized active poor of the society. Studying the impact of microfinance intervention is important to assess its viability on poverty reduction. The main objective of this study is to find out whether the provision of microfinance services of MFIs in Ethiopia has brought changes on the living standards of clients. It is focused on the impact of SFPI program at household and enterprise levels. Primary data were collected through close-ended and open-ended structured questionnaire from active clients, ex-clients (dropouts), and incoming clients (used as control groups) using random samples. Discussions with key informants and focus groups were administered to capture qualitative information. A total of 150 samples were selected using multistage simple random sampling. Among these samples 140 were valid. Settlement and gender composition were considered in sample selection process. Secondary data were gathered from different published and unpublished relevant materials. The study mainly applied analytical approaches such as frequencies, averages and percentages. The impact of delivering financial services to poor clients was analyzed based on some socioeconomic and political indicators in different levels. The findings revealed that SFPI program has made a positive impact on households’ income, asset ownership, housing condition, expenditure, and diet condition. However, the finding didn’t show the impact of SFPI on households’ access to education and medical facilities. SFPI credit delivery has also increased enterprises production capacity, net profit and employment opportunity to the client household members as well as the local community. Moreover, it has a positive impact on personal savings and women’s empowerment. Most of the findings are consistent with the hypothesis developed in the research. MFIs have contributed a great share in improving the living standard of the poor and reduce poverty at household level. Therefore, strengthening the development of MFIs in Ethiopia is an appropriate and appreciated policy instrument to realize the objectives of the Poverty Reduction Strategy of Ethiopia.

Item Type: Thesis (Masters)
Uncontrolled Keywords: Impact, poverty, microfinance, poverty reduction, clients, and poor
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
H Social Sciences > HM Sociology
Divisions: Africana
Depositing User: Selom Ghislain
Date Deposited: 22 Jun 2018 12:42
Last Modified: 22 Jun 2018 12:42

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