THE IMPACT OF DEDBIT MICROFINANCE ON POVERTY REDUCTIONIN WUKRO KILTE AWULAELO WOREDA, EASTERN TIGRAY, ETHIOPIA

Abstract

The purpose of this study was to assess the impact of microfinance services on poverty reduction. Specifically, this research tries to identify the factors affecting access to microfinance, to examine the constraints of accessing credit from the institution and to examine the impact of microfinance on poverty. A mixed research approach and explanatory research design were used; apparently, both primary and secondary data sources were employed and questionnaires were the main data collection instrument. Data were collected from 151 respondents. The findings of the study shows that, access to extension service and income of the household had a positive and significant effect on access to microfinance. On the other hand, family size of the household, land holding size and distance of household from microfinance office had a negative and significant effect on access to microfinance. The findings of the study further shows that members of microfinance had a better income than non-members which indicate the microfinance had a positive impact on poverty reduction.