THE IMPACT OF MICRO-FINANCE ON POVERTY REDUCTION OF PARTICIPATING WOMEN HOUSEHOLDS: THE CASE OF MICRO SOMALI FINANCE INSTITUTION, SOMALI REGION, ETHIOPIA

Abstract

Pro poor financial strategy in Ethiopia has been promising in the last decade, where practical steps have been taken by the government to provide legal frameworks and policies that promote financial intervention to the unbanked populations who face acute shortages of financial services. The purpose of this study was to identify the role played by Somali microfinance intuition in the poverty alleviation and development strategies using collected data from five weredas of the region including the institutions’ head office. The study used descriptive research design. The target population was 370, the study employed simple random sampling technique to select staff of the selected MFIs and clients. Both qualitative and quantitative data analysis methods were used. The study revealed that SMFI as a microfinance institution has been able to fight reduce poverty to a certain extent by providing microfinance services to different groups of women - productive or active poor, enable the household to increase their living standard through increase their, income also help the borrowers to own and live in the good house and engage in more economic and more profitable economic activities. The loan has major contribution in reducing poverty at family level and in the society in general by empowering women and creating job opportunities. Taking into account these factors could genuinely help in developing policies intended at promoting sustainable development.