The Role Of Microfinance Institution In Enhancing Living Standards Of Beneficiaries: (Thecase Of Busa Gonofa Micro Finance Of Ginchi Branch)

Abstract

The prevalence of poverty has been a common phenomenon in Ethiopia. Microfinance has been introduced and currently it is being practiced in the country as a tool to deliver financial service to the poor with the objective of reducing poverty and improve household livelihood. This research examines effect of microfinance institution in enhancing living standards of beneficiaries. The study uses cross-sectional data collected from the Busa Gonofa microfinance of Ginchi branch households to derive the empirical evidence. Standard deviation and inferential statistical methods like correlation was used for identify the impacts of microfinance intervention on improving the living standard of poor household in comparing client and non-client household. In this scenario, this research found that credit has a significant and positive impacts on household average yearly income, consumption, Education, health care, employment generations and housing condition in comparing with non-client respondents. These findings confirm that credit provided for rural household is an effective policy tool to reduce poverty. Therefore, strengthening the existing operation of microfinance in the Busa Gonofa micro finance of Ginchi would be appropriate socio-economic policy.