The Impact of Microfinance on Multidimensional Poverty Status of Rural Households in Gozamen District, East Gojjam Zone, Ethiopia

Abstract

Microfinance aimed at breaking the vicious circle of poverty in Ethiopia mainly by providing loan service for rural households. The main objective of this study is to examine the impact of microfinance loan service on multidimensional poverty status of rural households by taking evidence from Amhara Credit and Saving Association. To attain this objective, the researchers collect primary data by using household survey from the total of 290 sample sizes 145 from treated group and 145 from non treated group respondents by using quasi experimental design. To analyze the data, the resrahcers employed descriptive statistics and inferential statics. The propensity score matching model result reveled that microfinance loan service has a negatively impact on the multidimensional poverty status of rural households. It is also found that microfinance loan service has reduced standard of living, health and educational dimensions of poverty respectively for rural households of the study area. It is recommended that  government should give special attention to support microfinance’s who support the rural poor household heads and improve the awareness level of farmers about its role towards poverty reduction .

Keywords:-Microfinance loan, Multidimensional poverty, Impact, Propensity score matching model, Gozamen district

DOI: 10.7176/JPID/53-04

Publication date:March 31^st 2020