Case Study

Impact Assessment of the Microfinance Programme in Amhara Region of Ethiopia

Presented at the "International Conference on Rural Finance Research"

This paper presents the methodology and the findings of a USAID study aimed at assessing the impact of microfinancial services provided to more than 550, 000 clients in the Ahmhara region of Northern Ethiopia. The research methodology included both quantitative and qualitative data collected from 1600 clients and non-clients, and adopted the following approach:

  • The conceptual framework used to evaluate the poverty alleviation effect of the microenterprises adopted a holistic approach in which the starting point is the household, with its multiple activities and resources;
  • It considered economic decisions about microenterprises in relation to the overall economic strategies and monetary resources available to households, not just to the economic returns of enterprises and the creation of employment.

The paper concludes that:

  • The provided microfinancial services have a well defined impact in terms of improving food security, health status and education of children, creating additional assets (i.e. housing) as well as enabling the 'empowerment' of the marginalized;
  • Microenterprise financing serves several purposes in households, first of all consumption smoothing. This is something microfinance programs need to take into careful consideration;
  • Microcredit cannot succeed as an intervention on poverty unless other interventions accompany it, for example business development services and health education.

 

About this Publication

By Gobezie, G. & Garber, C.
Published