Impact of Microfinance on Poverty Reduction in Dega Damot District, Amhara National Regional State, Ethiopia

Abstract

The challenge Ethiopia is facing today is to reduce poverty and gear up the living standard of its people. One of the poverty reduction policies of the country therefore is the introduction of micro financial institutions to empower the economically marginalized segments of the society. Amhara credit and saving institution (ACSI) is one of the largest micro finance institutions operating in Ethiopia established in accordance with proclamation no. 40/1996 The objective of this study, therefore, is to find out whether Amhara Credit and Saving Institution (ACSI) has made changes on living standard of the clients based on tropical livestock unit and Income change, while the other objective is whether ACSI reduces the income gap between program clients and non-clients. Primary data were collected through structured questionnaire from clients and non-clients using simple random sampling method. Both are quantitative and qualitative in nature.Descriptive analysis and dichotomous binary model were applied in the study. The impact study was analyzed based on socio economic variables. The finding of the study indicated that the ACSI’s micro financing program has made positive contribution to its clients in relation with the observed variables in the study area. Therefore, attention should be given in strengthening the prevailing operation of the Amhara Credit and Saving Institution. Keywords: Impact; ACSI; logit regression; Ethiopia; Gini coefficient; Tropical livestock unit. DOI: 10.7176/RJFA/13-9-05 Publication date: May 31 st 2022