Assessment of the Role of Microfinance on Poverty Reduction in North Shewa Zone Ethiopia

Abstract

: The challenge Ethiopia faces today is to achieve sustained economic growth for healthy national development and reduce poverty. 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 is to find out whether the provision of microfinance services of ACSI MFI has brought about changes in alleviating poverty and improving the living standards of clients. Primary data were collected through closeended and open-ended structured questionnaire from clients as well as using focus group discussions and interviews with the officials and employees of ACSI. Secondary data were gathered from different published and unpublished relevant materials. The study mainly applied analytical approaches such as frequencies, averages and percentages. The impact of delivering financial services to poor clients was analyzed based on some socio-economic and political indicators in different levels. The finding of the study indicated that ACSI's micro financing scheme has had a positive impact on improving the living standards of its clients in the study area. Therefore, strengthening the development of MFIs in Ethiopia is an appropriate and appreciated policy instrument to realize the objectives of the Poverty Reduction Strategy of Ethiopia.

Keywords

• impact
• poverty
• microfinance
• poverty reduction