Determinants of Rural Women’s Decision in Participation of Microfinance Services: The Case of Omo Microfinance in Boloso Bombe District of Wolaita Zone, Ethiopia

Tekle Leza


In developing countries, among the poor, rural women are the poorest and more vulnerable.  In Ethiopia, poverty reduction is the most prevalent national issue that the government and people are determined fighting against it. Many efforts have been made to reduce the level of poverty in the country. Therefore, the main objective of this study was factors that influence women participation decision of microfinance services among smallholder farmers. Socio-economic, institutional, psychological and demographic factors that influence the level of women decision in participation of microfinance services. Employing multi-stage sampling technique 100 households were interviewed to gather data. Primary quantitative data were collected using interview schedule through face-to-face interview whereas qualitative data were collected through key informant interview and focus group discussion. Descriptive, inferential and econometric analyses were carried out. The computed independent T-test for the mean income difference was statistically significant among women decision in participation of microfinance service, suggesting that participants were in better-off position to improve their livelihoods. From the sixteen explanatory variables entered into the model, eight variables were found to be significantly determining women decision in participation of microfinance services in the study area at less than 1, 5 to 10 per cent probability levels. These are education level of the household head, land size, family size, credit service access, saving and livestock ownership significantly and  positively affects women decision in participation of  microfinance services while distance to market and owners perception affects negatively and significantly women decision in participation of  microfinance services  at less than 1 and10 per cent probability levels respectively. The findings of the study are likely to be important to microfinance institutions, governments and NGOs in designing policy to empower rural women socially and economically. This study makes the valuable contribution by providing a base to the microfinance institutions for strengthening and expanding their support to rural poor women.

Keywords: Microfinance, Ordered logit, participation, Women and Wolaita Ethiopia

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