Abstract:
Microfinance has become very important in global poverty reduction debates. The popular
assumption is that, enabling poor households access to credit helps households begin micro
entrepreneurship which would enable them improve their incomes and eventually escape from
poverty. The major causes of low economic growth and high incidence of poverty, in Ethiopia,
includes lack of income, assets, employment opportunities, education, health and etc. To reverse
the economic decline and poverty situation in the country, the Ethiopian government has taken
policy measure such as structural adjustment program (SAP), agricultural development led to
industrialization (ADLI), and poverty reduction strategy paper (PRSP), etc. Currently,
increasing the poor access to micro finance services is accepted as one of the tool to attack
poverty. This study assesses the impact of microfinance on poverty reduction the case of selected
clients of Oromia credit and savings share company (OCSSCO) in Gindeberet woreda, Western
Shoa Zone of Oromia Region, Ethiopia. The study used both primary and secondary data.
Primary data were collected through structured questionnaire from active and new (incoming)
clients. Secondary data were collected from different books, unpublished yearly or quarterly
reports journal of articles, CSA reports and other relevant official reports. A total of 242
samples were selected using two stage sampling technique. Descriptive and inferential statictics
of chi-square test of independence were applied in the study. The impacts were analyzed based
on the variables such as income, nutritional status, medical facilities, access to education,
saving, women empowerment, and employment creations. The findings indicated that OCSSCO
credit program has made a positive impact on households’ income, nutritional status, medical
facilities and employment creations. However, the finding didn’t show the impact of OCSSCO on
households’ access to education and women empowerement.
