EFFECT OF MICROFINANCE ON RURAL WOMEN EMPOWERMENT: THE CASE OF VILLAGE SAVING AND LOAN ASSOCIATION IN FEDIS DISTRICT, EAST HARARGHE ZONE, OROMIA NATIONAL REGIONAL STATE, ETHIOPIA

Abstract

This study set out to assess the effect of microfinance on rural women empowerment in the case of Fedis District East Hararghe Zone, Oromia National Regional State, Ethiopia. The study employed multi-stage sampling technique to draw 90 sample respondents. Enumerator assisted validated questionnaire was used to gather data from the sample households. Simple descriptive statistical analysis such as mean, standard deviation and percentage used to analyse the data. Results of the study revealed that the empowerment status of the village savings and loan association member sampled respondents is better than the non-member sampled respondents. The result has showed that marital status, dependency ratio, distances from the nearest market are found to influence women empowerment negatively. On the other hand, family size, level of formal education, years of experience in income generation, years of membership in village saving and loan associations and livestock ownership are found to influence women empowerment positively. The descriptive statistics results on saving and loan use pattern of the sampled respondents of the association members showed significant changes on saving and credit uptakes. In village saving and loan association microfinance products has creating wider opportunity for members to engage in productive activities and linkage with formal MFI institution enhanced access to credit services. However, women empowerment cannot be attained through mere provision of microfinance as it determined by other factors indicated above and other situational factors. Therefore, programs that aiming at inducing women empowerment through microfinance needs to consider the importance of factors that affect both negatively and positively. Besides this, recommends special attention for women living far from the district town in terms of promotion of appropriate income generation options.