The Effect Of Microfinance On Poverty Reduction In Case Of Vision Fund In Burayu Sub City.

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.