The Role of Microfinance Institutions in Empowering Women Economically in the Case of Olonkomi Town

Abstract

Microfinance is a type of banking service that is provided to unemployed or low-income individuals or groups who would otherwise have no other means of gaining financial services. The objective of the study is to assess the contribution of Microfinance Institution in women empowerment. Primary data would be collected through open and closed ended questionnaires from 50 respondents who are members of two financial institutions located in Olonkomi. Namely Eshet Microfinance Institution and Oromia Credit and Saving Share Company. Number of respondents are 21 from EMFI and 29 from OCSSCo out of 107 total population from both institutions. Data were analyzed by using ratio and table. The sources of data were primary data from the women users of microfinance institutions and secondary data was the official documents, reference books and other research materials related to the topic under the study. According to the findings from the study, micro-financing has yielded positive role on empowering women economically. The majority of women clients of selected MFIs have improved their access to and control over assets, decision making and social participation. Based on the findings reached, MFIs should formulate means of diversifying women’s income generating activities and also create awareness on how women could exercise better control over their incomes.