Gender, Poverty and Micro-enterprise Services in Ethiopia: Why Only Few Women are Joining?

Has micro-enterprise succeeded in reaching poorer women in Ethiopia?
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This paper examines the need for, and the success of, micro-enterprise programs in Ethiopia, with a special focus on their outreach to women. The paper discusses:

  • The role that micro-enterprise can play in alleviating poverty in Ethiopia;
  • Reasons why micro-enterprises target women;
  • The relationship between empowerment, resources, agency and achievements.

It describes the features of the group guarantee-lending model and examines:

  • Whether the program has achieved the empowerment objective and successfully extended microfinance to poor women;
  • The pros and cons of the group-lending methodology.

The report finds the following impediments to women accessing the program:

  • Self-selection of group members that leads to the exclusion of the very poor;
  • The following unfavourable factors:
    • Terms and conditions;
    • Loan size;
    • Low number of female loan officers;
    • Lack of business development services support;
    • Aversion to risk;
    • Shortage of time.

The paper states that microfinance helps alleviate poverty by:

  • Enhancing human capital;
  • Reducing vulnerability;
  • Providing savings and insurance services and emergency loans.

It lists the following positive features of the self-help approach:

  • Savings-based;
  • Pride of ownership and autonomy;
  • Integrated services of finance and business development;
  • Economies of scale;
  • Sustainability.

The paper concludes that for micro-enterprise services to be successful in poorer areas, there is a need for improvement in rural infrastructure and education about microfinance.

About this Publication

By Gobezie, G.