Abstract:
This study assesses the effectiveness of microfinance services provided by Vision Fund
Microfinance Babich Branch in reducing poverty among its borrowers in the Liben Jawi
district. The study's objective is to evaluate the contribution of microfinance services to
poverty reduction. A sample size of 206 households was determined through random
selection using the lottery method. Primary data was collected directly from clients via
questionnaires and analyzed using descriptive and inferential statistical methods. The
findings indicate variables like age, family size, distance from the lending microfinance
institution, education status, sex, training, loan utilization, membership duration, and
savings significantly influence poverty reduction. Conversely, marital status and loan
duration were found to be insignificant predictors. The study is contextualized within
Ethiopia's broader efforts to sustain economic growth and accelerate poverty reduction,
emphasizing the strategic role of microfinance institutions. The results highlight the
significant impact of Vision Fund Microfinance Babich Branch's services in improving
the economic conditions of households in the study area. It is recommended that Vision
Fund Microfinance Babich Branch invest in comprehensive training programs to
enhance borrowers' financial management skills and effectively utilize loans. Encourages
borrowers to fully utilize loans for income-generating activities that maximize the impact
on poverty reduction. Regular follow-ups should be conducted to track progress and
adjust strategies as needed, ensuring the effectiveness of microfinance services.
Continuous monitoring and evaluation will help identify areas for improvement and
ensure the services remain impactful.
