An Assessment of the Role of Microfinance Institution in Urban Poverty Alleviation and Women’s Empowerment: The Case of Addis Credit and Saving Institution in Kolfe Keranyo Sub-City

Abstract

This thesis paper tries to examine the following research questions: to what extent AdCSI schemes help beneficiaries by alleviating poverty? What are the roles of participating in MFI programs in the empowerment of women? And what are constraints/ challenges faced by clients of AdCSI in KKSC in getting and utilization of credit. The analytical framework for the study is adopted from Hulme (2000). Primary data collected from borrowers and key informants through close ended questionnaires and interview guide prepared for interviewing forty five sample borrowers and five key informants from three sub-branches of AdCSI in KKSC of Addis Ababa and the Statistical Package for Social Science software applied to simplify the data analysis. The findings prove that the income of the borrowers increased to the extent that it exceeds expenditure and improve their saving; the expenditure of borrowers improved to cover the cost of consumption, food, health, education and other expenses; the participation in the microfinance program created employment opportunity beyond the participants to their families and other members of the community; the voiceless women borrowers in their own life before their participation in the microfinance program have major role in decision making beyond their life to their families and the community after joining the program. However short repayment period, high interest rate on loan, small amount of loan provided, and low interest rate on saving are proved to be constraints or challenges in getting and utilizing of loan by borrowers from the institution. This paper may help as a source of information in the area of microfinance and as a clue to AdCSI to conduct deeper assessment and revise its credit modalities and the programs.