Abstract:
This study investigated the effect of microfinance on poverty reduction in case of vision
fund in Burayu sub city, Oromia Regional state Ethiopia. The study used both primary and
secondary data. Primary data were collected through structured questionnaire from active
or new (incoming) clients. Secondary data were collected from different books,. The
researcher has been applied poverty reduction as dependent variable and; saving factor,
Job creation factor, income factor, empowerment factor, and economic change as
independent variables. The study was conducted at four woreda namely, Gefersa Buray,
Burayu keta, Ejersa Goro and Ane Dima purposively. Using random sampling technique,
267 samples are drawn from 800 total populations. Among of respondent there are 129
male and 138 female. The researcher use quantitative and qualitative research as well as
descriptive and explanatory research design used for in this study. Quantitative of these
research method was used through survey questionnaires which were constructed in 5-
point Likert scales and distributed obtain primary data from employees/customers of
micro finance institution vision fund in burayu Sub City from four woreda. Data collected
through, unstructured questionaries’ and analyzed data using SPSS version 20. Then,
LRM regressions model was applied after the data sets were transformed to natural log
form. The finding of the study show that saving, availability of income and job creation,
the independent variables have a strong positive relationship with poverty reduction
whiles empowerment and economic change factor has negative relationships within
poverty reduction. And the correlation result shows that economic change and
empowerment the independent variables have a weakly negative relationship with reduced
poverty reduction. Based on the finding the study recommended that the MFI of vision
fund should be accompanying in providing training to the poor in their business activities
including the importance of credit, loan utilization, market situation, and saving
mobilization. Moreover, the MFI has mobilizing savings from the public having clear and
create structure of saving and governance make adjustments with inflation. Finally
Managed leverage equity to access capital market with regional government, NGOs, and
individuals and looking for donor agents.
