Impact of Vision Found Microfinance on Poverty Reduction Wolaita Zone, (In Cases of Sodo Town), Southern, Ethiopia

Abstract

Main Purpose of Vision Found 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.  The main objective of this study was to find out whether the provision of microfinance services has brought changes on the living standards of participant focusing on the case of Vision Found MFI program in Sodo town at household level.  Mainly primary data was collected through structured questionnaire from 120 sample size. Vision Found microfinance participants and 100 non- Vision Found microfinance participants from three sub cities using random sampling methods. Propensity score matching was used to assess the impact of Vision Found microfinance on household income, expenditure, saving and asset accumulation value. The estimation results show that participation in vision Found microfinance had brought significant impact on household income, saving and aggregate expenditure and asset accumulation value. Further, sensitivity analysis test on estimated shows effect of vision found microfinance was insensitive to unobservable selection bias; even the two group allowed to differ in their odds of being treated up to 220% in terms of unobserved in which implying that being pure effect of program intervention. There for, by improving living standard of participant and as far as result was the only effect of intervention, thus microfinance intervention reduces poverty at household level.

Keywords:Vision Found Microfinance, household income, expenditure, saving and asset accumulation value, Probit model

DOI: 10.7176/JCSD/67-02

Publication date: January 31^st 2022