| Abstract: | 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 was to assess the impact of microfinance services of MFIs in Ethiopia and
the changes it has brought on the living standards of clients. It was focused on
the impact of SFPI program at household and enterprise level.
The study was conducted at the branches of the FSPI by employing the “before”
and “after” method so as to evaluate the impact of the microfinance institution
on reducing the poverty level of its clients.
Primary data was collected using structured interview, FGD, and observational
check-list while secondary data was obtained from the records, journals,
proceedings, bulletins, internet and various books. Multistage sampling method
was employed to take a sample of clients from the total. Both descriptive and
inferential statistics such as mean, percentages, Wilcox on signed rank rest and
independent two sample t-test was employed.
In general the credit scheme has increased the mean income of respondents and
had improved the ownership of different productive assets, such as, oxen, cows
and others. SFPI program has made a positive impact on households’ income,
asset ownership, housing condition, expenditure, diet condition,’ access to
education and medical facilities. SFPI credit delivery has also improved
enterprises’ production capacity and employment opportunity of the local
community.
And there was no significant difference between the sexes regarding the socioeconomic
variables except for saving and the level of income after loan. MFIs
have significantly contributed towards 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. |
