THE ROLE OF MICRO FINANCE INSTITUTION IN URBAN POVERTY ALLEVIATION AND WOMEN

85 Pages·2015·0.7 MB·English

An Assessment of the Role of Microfinance Institution in Urban
Poverty Alleviation and Women’s Empowerment: The Case of
Addis Credit and Saving Institution in Kolfe Keranyo Sub-City

MSW Dissertation Research Project Report
(MSWP-001)

By
Rahmeto Juhar Yessuf
Enrolment No: 109100831

Project Supervisor
Mosisa Kejela (MR.)

Indira Gandhi National Open University School of Social Work

November, 2014
Addis Ababa, Ethiopia

i
DECLARATION
I hereby declare that the dissertation entitled “The Role of Microfinance Institution in Urban
Poverty Alleviation and Women’s Empowerment: The Case of Addis Credit and Saving
Institution in Kolfe Keranyo Sub-City” submitted by me for the partial fulfillment of the
Masters in Social Work (MSW) program of the Indira Gandhi National Open University
(IGNOU) is my own original work and has not been submitted earlier, either to IGNOU or to
any other institution for the fulfillment of the requirement for any other program of study. I also
declare that no chapter of this manuscript in whole or in partially is lifted and incorporated in this
report from any earlier work done by me or others.

Place: Addis Ababa Signature: ____________________
Date: November 2014 Name: Rahmeto Juhar Yessuf

Enrollment No: 109100831
Address :[phone],
Addis Ababa
Ethiopia

ii
CERTIFICATE
This is to certify that Mr. Rahmeto Juhar student of MSW from Indira Gandhi National Open
University was working under my supervision and guidance for his/her Project work for the course
MSWP-001. His Project Work entitled “ The Role of Microfinance Institution in Urban
Poverty Alleviation and Women’s Empowerment: The Case of Addis Credit and Saving
Institution in Kolfe Keranyo Sub-City” which he is submitting, is his genuine and original
work.

Place: Addis Ababa Signature: ____________________
Date: ____________________ Name: Mosisa Kejela
Address :[phone]
Addis Ababa
Ethiopia

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Acknowledgements
I am deeply thankful to Mr. Mosisa Kejela, my supervisor, who sacrificed his precious time and
exercise his tirelessly effort to provide me constructive comments, suggestions and guidance in
organizing and structuring this paper. I have been very fortunate in receiving guidance from him
throughout the process of writing the paper. His patience and support were a great help in getting
me through. I sincerely thank him for his guidance without whose advice this paper would not
have been what it is now.
I would like to express my pleasant thanks to the staff of Addis Credit and Saving Institution in
the head office and in Kolfe Keranyo sub-city branch and sub-branches in Woreda 01, 05 and 06
for supporting me in data collection process and providing me with all necessary documents and
information.
Great appreciation goes to sample respondents who spared their precious time to respond
willingly to the lengthy questionnaire; without their cooperation, this study could not have been
completed.
Above all, my greatest thanks are to almighty Allah, who makes it all possible; and of course my
deepest appreciation is to my family for their overall assistance and continues support during
preparation of this thesis paper.

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Table of Contents Page
number
Declaration ii
Certification iii
Acknowledgements iv
Table of contents v
List of Tables vii
List of Figures ix
Acronyms x
Abstract xi
CHAPTER ONE 1
INTRODUCTION 1
1.1 Background of the study 1
1.2 Statement of the problem 2
1.3 Research Questions 4
1.4 Objective of the study 4
1.5 Significance of the study 5
1.6 Scope of the Study 6
1.7 Limitation of the study 6
1.8 Organization of the Study 7
1.9 Operational and contextual definition of Terms 7
Chapter Two: Literature Reviews 8
2.1 Concept of Poverty 9
2.2 Measures of poverty 10
2.3 Concept of Microfinance and Its Development in Ethiopia 12
2.4 Microfinance and Poverty Alleviation 15
2.5 Microfinance and Women’s Empowerment 16
Chapter Three: Study Design and Research Methodology 18
3.1 Study Area 18
3.2 Study Design 18
3.3 Sampling Method 19
3.4 Data Gathering tools and procedures 20
Chapter Four : Data Presentation and Analysis 21
4.1. Introduction 21
4.2 Socio-Demographic Characteristics of Respondents 22
4.3. Targeting the Poor 26
4.3.1 The Average Monthly Income of Respondents 27
4.3.2 The Average Monthly Expenditure of Respondents 28
4.4 Respondent’s Business and Source of Revenue Before Joining MF Program 30
4.5. Borrowers Ability to Pay Their Children’s School Fee Before joining MF 32
Program
4.6 The Impact of Microfinance on Health Care and Quality of Food 34
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4.7 Ability to Buy Clothes Before and After Joining Credit Program 36
4.8 Information Concerning the Asset of Respondent 37
4.9 Information Regarding Employment Opportunity of Respondents 38
4.10. Women’s Empowerment 41
4.11 Information concerning Credit Mobilization and Utilization 48
Chapter Five : Discussion and Conclusion 58
5.1. Discussion 58
5.2. Conclusions 61
Areas For Further Research 62
Bibliography…….................................................................................................. 64
Annex I......................................................................................................... 69
Annex II……………......................................................................................... 74

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LIST OF TABLES
Number Title Page
Table 1 The Characteristics of Respondents by Sex …………………………… 22
Table 2 The Characteristics of Respondents by Age…………… 23
Table 3 The Characteristics of Respondents by Education 23
Table 4 The Characteristics of Respondents by Marital Status….. 25
Table 5 The Characteristics of Respondents by Family size 26
Table 6 Mean for the Average Monthly Income and Expenditure of respondents 30
Change in Respondent’s Ability to Pay Education Fee before Joining the Credit
Table 7 32
Program
Change in Respondent’s Ability to Pay Education Fee After Joining the Credit
Table 8 33
Program
Table 9 Response of Respondents on Affording Health Care 34
Table 10 Response of Respondents on the Number of Food Items and Quality of Food… 34
Table 11 Respondents According to their ability to buy clothes 36
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Table 12 Respondents According to Their Asset……………………………………….. 37
Respondents Reply on Number of Employees in Their Business Before and
Table 13 40
After Joining MF program
Questions and the Response of Respondents on decision making on Schooling
Table 14 42
Children and Procurement of Food and Clothing
Table 15 Decision Making on Utilization of Loans 43
Reply of Respondents on Work Experience, Credit Receiving Role on Self
Confidence and the Role of Participation in MF Program to Improve Decision
Table 16 46
Making.
Responds of the Borrowers on their Reason to Take Loan and the Utilization of
Table 17 50
the Loan
Respondents According to Their Lending System Used and Defaulter’s Penalty
Table 18 52
Paid
Respondents According to their Group Established by and Opinion on the
Table 19 53
Suitability of Credit Criteria
Respondents According to Their Interest Payment, Interest Rate and Time
Table 20 54
Given to Repay Credit
Respondents According to Their Interest Payment, Interest Rate and Time
Table 21 57
Given to Repay Credit

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LIST OF FIGURES

Page
Figure 1 Respondents According to Their Average Monthly Income 28
Figure 2 Respondents According to Their Average Monthly Expenditure 29
Business and Source of Revenue of Respondents Before Joining Micro Finance 30
Figure 3 Program
Figure 4 Respondents according to Increase in Their Income After Joining MF 31
Figure 5 Respondents According to their Employment Opportunity before Joining MF 40
Figure 6 Representation of Respondents Role in the Community Participation 45
Respondents According to Their Views on the Amount of Credit Provided by 49
Figure 7 AdCSI
Respondents According to their respond on Income Increase after Joining MF 52
Figure 8 Program
Figure 9 Respondents Reply on Their Disliked AdCSI’s Services 56

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Abbreviations and Acronym
AdCSI Addis Credit and Saving Institution
AVF Vulnerability Framework
ADLI Agricultural Development-Led Industrialization
CBOs Community Based Organizations
CSA Central Statistics Agency
ECA Economic Commission of Africa
GDI Human Development Index
GDP Gross Domestic Product
GTP Growth and Transformation Plan
HDI Human Development Index
KK Kolfe Keranyo
KKSC Kolfe Keranyo Sub City
MC Micro Credit
MCIs Micro Credit Institutions
MFI Micro Finance Institution
MFIs Micro Finance Institutions
MoFED Ministry of Finance and Economic Development
NBE National Bank of Ethiopia
NGO Non-Governmental Organization
NGOs Non-Governmental Organizations
OAU Organization for African Union
PSDEP Plan for Accelerated and Sustained Development to End Poverty
UNCHS United Nations Center for Human Settlement
UNDP United Nations Development Program
WB World Bank

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