Impacts of Micro-Finance on Women’s Economic Empowerment: The Case of Selected Branches of Harbu Micro-Finance Institution in Jimma Zone.

Abstract

Micro finance is primarily perceived as a development strategy that provides credit and savings services to the poor, particularly women, for income generating activities to bring about economic empowerment. Women constitute nearly half of the Ethiopian population and they involved in different sectors of the economy, although poor women are engaged in heavier and highly time consuming workloads, they never obtain the commensurate earnings. This research was conducted in Jimma Zone Harbu micro finance institution, to analyze the impact of micro finance on economic empowerment of women. A combined research approach (a mix of quantitative and qualitative methods of data collection and analysis) was employed and both primary and secondary data were collected. Data were collected through survey questionnaires and focus group discussion. Multistage sampling method was used. Branches and women borrower in and above third loan cycle were selected purposively. Sample respondents were selected randomly. A total of 150 women borrower were selected to gain insight on impact of Harbu micro finance on women’s economic empowerment in the study area. Descriptive and inferential statistics and econometric analysis were employed to address the specific objectives of the study. SPSS (Version 20) was used as analytical tool. Empowerment index was prepared from seven important indicators of economic empowerment in microfinance and assessed the economic empowerment status of the respondents. The finding of the study reveal that 57.3% (n=86) of respondents were in low category of economic empowerment before joining HMFI for credit program, amazingly after joining HMFI for credit program the percentage of sampled respondents in the low category has decreased to 4.7% (n=7) in the study area. Quite reversely after joining HMFI the percentage of sampled respondents in high category of economic empowerment has increased from 6.7% (n=10) to 60.7% (n=91) in the study area. The ordered logit analysis employed with statistically significant variables to analyze determinants for women’s economic empowerment in the study area showed that dependency ratio, marital status, annual income and loan size were significant factors determining women’s economic empowerment in the study area. Moreover surveyed result shows that about 93.3% (n= 140) of sample respondents have reported as their annual income increased after joining HMFI for credit program. In general this study revealed that the women’s economic empowerment have positive association with micro finance services. However, women economic empowerment cannot be attained through mere provision of microfinance services as it determined by other factors indicated above. Therefore, programs that aiming at inducing women economic empowerment through microfinance needs to consider the importance of determinants that affect both negatively and positively. Besides this, all concerned bodies should give due attention for family planning and gender equality issues and also should focus in income sources diversification.