Women Farmers Empowerment through Microfinance Services: The Case of East Shoa of Oromia Regional State, Ethiopia

Abstract

Poverty reduction is the most prevalent national issue that the government and people of Ethiopia are determined fighting against it. Many efforts have been made to reduce the level of poverty in the country. As part of this effort, microfinance was introduced with the objective of providing microfinance services to poor, specifically targeting women. This study was conducted with objectives of the study was to assess the empowerment women members in the study area and to identify factors affecting women empowerment through microfinance services. Primary and secondary data were collected from 160 women members and non members of microfinance users. The data were analyzed with the help of descriptive statistics, ordered logit econometric model and presentation of group discussion results and case stories. Empowerment index was prepared from important indicators to assess the empowerment status of the sampled respondents. Ordered logit model was also used to assess factors affecting women empowerment through microfinance in the study area. The five empowerment categories differed at less than one percent level in most of the hypothesized variables. The explanatory variables are marital status, level of formal education, extension participation, and years of experience in income generation, years of membership in MFI, contact with development agent, cumulative amount of loan, distance from district town, achievement motivation and level of aspiration. A total of twelve variables were fitted into the model. Out of them, seven variables are found to have influence on women empowerment. Accordingly, years of experience in income generation , years of membership in Micro finance institution and contact with development agent are found to have positive influence on women empowerment. On the other hand, age , marital status, distance from the nearest market and distance from the district town  are found to have negative influence on women empowerment.

Keywords: Empowerment, Micro finance institution, poverty reduction, Women