AN ASSESEMENT OF THE ROLE OF MICRO FINANCE INSTITUTIONS IN URBAN POVERTY ALLEVIATION: (The Case of Addis Credit and Saving Institution In Akaki Kality Subcity)

Abstract

Poverty is a critical problem of all countries in the world regardless of their level of development. The whole purpose of development and Development Studies is to fight against poverty and reducing both urban and rural poverty in the world to the possible minimum level through different interventions. Microfinance considered as one of the major interventions in poverty alleviation all over the world. Therefore, the general objective of this study is assess the role of microfinance Institution in urban poverty alleviation in Addis credit and saving Institution in Akaki Kality sub city judged from the employee and customer point of view. Accordingly, convenience-sampling technique used to selected and distribute questionnaire to 170 customers and interview to five employees of the micro finance in Akaki Kality sub city. The study aimed to assess the level of customer perception towards the role of micro finance Institution in urban poverty alleviation and the data collected are analyzed using descriptive statistics tool such as frequency and percentage as used to present as required. The result revealed that AdCSI scheme has made positive contribution to the clients in relation with observed variables. The contribution of microfinance analyzed based mainly on income, which in turn has effects on nutritional status, education fee, medical facilities, employment generation, and empowerment among others. Besides, significant number of borrowers can afford expenses on education, clothing. They have no income generating mechanism before joining in the Institution among others. Therefore, strengthening the existing operation with other support means of income generating mechanism would be appropriate to address the problem of urban poor. finally, AdCSI should revise its strategy related to the loan repayment period, its high interest rate on loan, small amount of loan, its low interest rate on saving, etc, so as to encourage the poor in both financial and non financial services