The Impact of Microfinance Institutions on Improving the Livelihood of Their Clients: The Case of SMCP-Eritrea

Abstract

Microfinance institutions supply loans, savings and other financial services to the poor and other low income clients on a sustainable basis and play a role in the alleviation of poverty. The objective of this article is, therefore, to examine the impact of Saving and Micro-Credit Program (SMCP) in improving the livelihood of its clients. SMCP is one of two microfinance institutions active in Eritrea. The data collected from clients (both old and new) was analyzed through the help of Analysis of Variance (ANOVA). The result indicated that there is a statistically significant relationship between duration of cliental membership and mean income of clients of SMCP. Thus, the findings reveal that SMCP plays significant role in improving the livelihood of its clients through its provision of financial services. It is therefore recommended that microfinance policy should further be publicized so that other low income members of the Eritrean society would be aware and demand financial services to grow their small business and improve their economic status.

Keywords: Microfinance, SMCP, Clients livelihood, ANOVA, Eritrea

DOI: 10.7176/RHSS/13-11-02

Publication date:June 30^th 2023