Impacts of Microfinance Institution on the Living Condition of Rural Women: A case study on the Oromia Credit and Save Share Company in Shirka Woreda, Oromia Region.

Abstract

The major causes of low economic growth and high incidence of poverty, in Ethiopia, includes lack of income, assets, employment opportunities, education, health and etc. To reverse the economic decline and poverty situation in the country, starting from 1993 the Ethiopian government has taken policy measure such as structural adjustment program (SAP), agricultural development led to industrialization (ADLI), and poverty reduction strategy paper (PRSP), and currently the transformation plan, increasing the poor access to micro finance services are accepted as one of the tool to attack poverty. OCSSCO is one of the MFI that was established in August 1997 to achieve these objectives in the region. This thesis attempt to see the impact of this institution whether it improves the living standard of its clients (women) or not using some variables and the challenges it practices in the Shirka Woreda. Primary data were collected through structured and semi-structured questionnaire from women clients. Secondary data were collected from different published books, unpublished yearly or quarterly reports journal of articles, CSA reports and other relevant official reports. The assessment takes into account the general characteristics and impacts. The impact assessment was based on the variables such as income, nutritional status, access to education, medical facilities, saving and employment opportunities. The finding of the study indicated that the OCSSCO’S micro financing scheme has had a positive impact on improving the living standards of its clients in the study area using the above indicated variables. Absence of office and other facilities, high interest rate, low amount of loan, and problem in the knowhow of the poor who operates their business in the environments with high business risk in nature has been found in the study. Therefore, OCSSCO should fulfill different facilities and develop the capacity of its staff. In addition to this, OCSSCO must make an effort to strengthen its financial capacity in order to increase the amount of loan it disburses for each client.