Do urban poor benefit from microfinance institutions?

Abstract

Microfinance institutions (MFIs) play a vital role in the economic development of many developing countries. They offer loans and/or technical assistance in business development to low-income community in developing countries (Hartungi, 2007). Given the existing reality of microfinance institutions in Ethiopia, this studywas intended to examine whetherurban poor benefit from micr finance institutions with particular reference of Jimma administrative zone Kersa Distric,Ethiopia. The empirical evidences of different countries and concept of different literatures showed that the provision of money (credit) to the poor will contribute towards increasing their income, schooling of their children, their nutritional status, saving and productivity which are the major parameters in alleviating poverty. The population for the study encompassed the people who have been engaged in microfinance activities for at least two years and live Kersa District. The sample size for the purpose of this research was 90 microfinance clients for whom structured questionnaire were used for collecting the data, and interview were held with the employees of the microfinance institutions. Hence the study reveals that MFI’ are playing their pivotal role in alleviating urban poverty