Abstract:
In Ethiopian microfinance sector is one of the fastest growing in the world; it has recently progressed from humanitarian orientation to combining outreach and viability missions. Most of Ethiopian societies specifically low income households do not have access to micro credit due to high transaction cost associated with small size of the loan and different requirements imposed by the lenders. In the absence of formal providers, the MFI in Ethiopia has emerged to assist such like societies in providing access to financial services. The general objective of this study is to assess the role of micro finance institution in improving the living standard of households in study area. The study was conducted using quantitative research approach and cross- sectional design. All Vision Fund MFI beneficiaries of Ambo branch were considered as target population for the study. Vision Fund MFI Ambo branch chosen for this study purposively due to the fact Vision Fund of Ambo branch has many clients. Total 367 participants of the study have been selected as subjects for the study as arbitrary when they came to the center for services. Descriptive statistical techniques used for data analysis. The findings revealed that the societies‟ living standard has been improved doe to using the microfinance institute services provided. Specifically, the societies‟ income generating activities, daily income, saving habits, asset accumulations have been improved after they started using microfinance services. Monthly average income is improved than
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monthly average expenditures. Additionally social services like health and education activities have been im
