Abstract:
Nowadays, the potential danger posed through climate variability and change on the global as
well as local ecosystems is indisputable. Primarily, change in the state of climate is a major
threat to livelihood activities, in general and rain-fed agricultural production and productivity, in
particular. Thus, this study aimed at assessing the state of climate variability, and the roles of
MFIs towards climate adaptation actions. The study covered 370 household heads that were
determined based on a random sampling technique. Smallholder farmers’ access to MFI for
adaptation actions as well as factors influencing such access were analyzed using logistic
regression model. The study analyzed the historical trend of rainfall and temperature variability
over the period of 1990 to 2020 based on gridded rainfall and temperature data from Aje station,
as well as KII, FGD and survey observations. The standardized anomaly and Coefficient of
Variability were adopted to examine the state of the climate variables. The trends of rainfall and
temperature variability were measured using MK test while Sen’s slope estimator was used to
determine the magnitude of change in the rainfall and temperature. Though statistically not
significant, the general tendency of the seasonal mean rainfall was annually decreasing at the rate
of -0.9063mm, -1.5264mm, and -1.0319mm for Bega, Belg, and Kiremt, respectively and the
annual mean rainfall was decreasing annually at the rate of -3.9892mm. The mean maximum
temperature during Bega, Belg, and Kiremt seasons and the annual mean maximum temperature
was significantly increasing annually at the rate of 0.0940C, 0.1250C, 0.07190C and 0.09520C
respectively; and the average minimum temperature was increasing annually at the rate of
0.13690C, 0.06980C, 0.07580C and 0.09080C, respectively. Thus, the findings reveal that the
incidences of climate threats like drought, floods and high temperature were affected crop
production that enforced the households to apply agricultural adaptation strategies like crop
diversification, drought-tolerant seed cultivation and change in crop variety were adopted to
reduce the vulnerability of crop farming. The major MFIs that contribute to the facilitation of
financial services include OCSSCO, Cooperative and CBOs. Generally, demographic and socio economic factors that comprise microfinance associations’ membership, farming experience,
annual income, adaptation strategy trainings, access to climate information and proximity to
MFIs were found to have a statistically significant effect, at 5% level, on the access to MFIs.
Nevertheless, MFIs profoundly contributed to climate threat adaptation investments to build the
adaptive capacity of vulnerable households.
