The Impact of Microfinance on Living Standards, Empowerment and Poverty Alleviation of the Poor People in Ethiopia, A Case Study in ACSI

Abstract

The study tries to look at the impact of microfinance on the lives of the poor people. There are different views on micro credit as a powerful development tool regarding its success in developing the lives of the poor and some times these views are contradictory. However poverty is a global issue; it is a problem that even the wealthiest nation is facing. In this scenario country like Ethiopia is facing a great challenge to alleviate or reduce poverty because poverty is becoming cause of many problems like illiteracy, unemployment, diseases like depression, stress etc. In order to control these diseases first we have to control poverty. At government level and also at international level many strategies are made every day to control poverty. But now Dr. Younis gave a formula of micro credit that successfully worked in Bangladesh and is now replicated all over the world and also in Ethiopia so; the purpose of the study was to observe that what role micro credit plays in Ethiopia on living standards, empowerment and poverty alleviation. The study was conducted in two branches of Amhara Credit and saving institutions that are Debratabor and Estie. Those people are targeted who have taken micro credit so that the comparison of living standard before and after use of micro credit can be made and hence it can be seen that, if there is any improvement in their living standard after using micro credit or not.

The study was based on questionnaires which were distributed to the clients of Debratabor and Estie branches of ACSI along with experienced data collectors; as a result, the respondents can easily understand it and fill it accordingly. Sample for this survey was 150 with 75 respondents per branch. Some of the factors that show poverty reduction are Training and education, clean water and hygienic environment, nutrition and adequate food, accommodation, income and savings. Overall we can say that training and education, clean water and hygienic environment, nutrition and adequate food, accommodation, income and savings are important factors of poverty reduction. The results that have been analyzed with microfinance permit the following conclusions:  almost all the clients reported an increase in their incomes which has improved their standard of living, have sent their children to school; have been able to pay for their medical bills and can feed their families, can cope with future crises using their savings, have been empowered economically and their positions in the family as well as in the society.