The role of micro-finance on women's economic empowerment in southwest Ethiopia: In the case of four weredas around gilgel gibe hydroelectric power dam

Abstract

In Ethiopia, microfinance programs are currently being promoted by the government as well as nongovernmental organizations (NGOs) as a solution strategy for simultaneously addressing both poverty alleviation and women's empowerment. However, only a limited number of researches attempted to explore the relationship between women's participation in micro-credit programs and their empowerment by using empirical data. To fill this gap, we conduct a crosssectional study with overall aim of assessing the role of MFI's on women's empowerment. We employed a multi-stage sampling approach and a total of 374 women's, 182 MFI clients and 192 non-clients, from foursvoredas around Gilgel-Gibe HydroelectricPower Dam were included in to study. Using a structured questionnaire adopted from the 2011 Ethiopian demographic health survey, we collected data on background characteristics of women's and their household. Further, additional data were collected on characteristics specific to women's empowerment. Four measures of women's empowerment, namely, source and level of income, control and access to asset, saving habit, and participation in household decision, were used, where the last one is further divided in to four types of household decisions. Both household and respondents background characteristics were summarized and reported using various descriptive statistics, such as, tables, and summary statistics. Client and non-client women's are then compared with respect to the above mentioned women's empowerment components. In addition to this, incoming-clients were also compared with matured-clients, in order to examine the effect of the duration of microfinance membership on women's empowerment. To test whether or not the observed variation in decision making autonomy among client and non-client women's can be explained by a variation in membership adjusting for other confounding fiiciors we fit 5 binary logistic regression model. WI membership status was observed to have a statistically significant association with source and level of income (p-value less than 0.000 for both), where about 28.12 % of non-members said their level of income decreased over the last 12 month, this happen for only 4.95% of the members. Similarly, while the source of income for 89.0% of members increased and for none of them decreased over the last 12 month, for more than half of the non-member women's their source income were decreased. MFI was also statistically significantly associated with control over asset (p-value <0.000), where in 20% of non-client women's their husband only makes decision about their own earning only in 3% of client women's did not have a final say on how her own earning used. Further, MFI membership was observed to have a significant effect on women's participation in decision about their own health care, family visit and number of decision. The odds of non-client women to participate in decisions about their own health care and family (relative) visit are 0.55 and 0.51, respectively. as compared to client women. Further, the odd of non-client women to participate in at least three of the decisions made at household level is 0.39 as compared to client women. Beside MEI member ship, age, marital status, education level, household headship status, and type of earning had a significant effect on women's participation in decision. Beside this success story of MFI, loan repayment problem was observed on some of the clients due to various reasons. Therefore, considering the contribution of MFI in alleviating the root cause of poverty, the government of Ethiopia and NGO's working on this area should focus on increasing the coverage of MEls and in providing training for members before loan which is crucial for the achievement of the goal of this program, serving the ignored one.