The Impact of Microfinance on Multidimensional Poverty Status of Rural Households in Gozamen District, East Gojjam Zone, Ethiopia

Abstract

Microfinance aimed at breaking the vicious circle of poverty in Ethiopia by providing financial service and capacity building training for rural households. The main objective of this study is to examine the impact of microfinance service on mutidimestioanl poverty status of rural households. To attain this objective, the researchers collect primary data by using household survey from the total of 290 sample sizes 145 from treated group and 145 from non treated group respondents by using quasi experimental design. To analyze the data, the resrahcers employed descriptive statistics and inferential statics. The propensity score matching model result reveled that microfinance service has a negatively impact on the multidimensional poverty status of rural households. It is also found that microfinance service has reduced standard of living, health and educational dimensions of poverty for rural households of the study area respectively. It is recommended that the government should give special attention to support microfinance’s institutions that support the rural poor household heads and improve the awareness level of farmers about its role towards poverty reduction.

Keywords:Microfinance, Multidimensional poverty, Impact assessment, Propensity score matching model, Gozamen district

DOI: 10.7176/JESD/12-21-04

Publication date: November 30^th 2021