Livelihoods are ‘means of making a living’, the various activities and resources that allow people to live. It comprises the capabilities, assets (including both material and social) and activities required for a means of living. Thus, microfinance programs have been considered as one of the main instruments in livelihood improvement in recent development agenda. Microfinance comprises the provision of financial services including credit and other facilities like savings, insurance, and transfer services to poor household. The study was conducted in Geniji-Dalecho and Bulbulo kebeles among 35 target kebeles of the OCSSCO. The main objective of the study is to identify the contribution of OCSSCO in improving household livelihood through providing credit. Further, the study used both primary and secondary data sources. The primary data was collected with semi-structured interview and focus group discussion from sampled respondents; whereas, secondary data gathered from different documents of the microfinance institution that exists in the study area. Stratified random sampling was used to select 60 respondents (35 beneficiaries and 25 non-beneficiaries) based on the principle of probability proportional to size (pps). Generally, Microfinance Institutions have an explicit potential that intends to improve the livelihoods of households. While improving livelihood, microfinance (OCSSCO) credit service increases the income of the clients; which, in turn, enable them educating their children and improves their nutritional status. Inferential statistics such as crosstabs; independent sample t-test and custom table are used in data analysis. Descriptive statistics like frequency, percentage, mean and standard deviation were employed to analyze the data. Chi-square (for categorical variables) and t-test (for continuous variables) were used to see the significance of the relationships of independent variables with dependent variables. Moreover, the qualitative data was analyzed by describing, summarizing and interpreting for further clarity. Finally, conclusion and recommendation were made based on the findings obtained from result and discussion.
Key words: assets, client, role, microfinance institution, livelihood,
Table of Contents
1. INTRODUCTION
1.1. Background
1.2. Problem statement
1.3. Objective of the Study
1.3.1. General objective
1.3.2. Specific objectives
1.4. Research Questions
1.5. Significance of the Study
1.6. Scope and Limitation of the Study
1.6.1. Scope of the study
1.6.2. Limitation of the study
1.7. Conceptual Framework
2. LITERATURE REVIEW
2.1. Theoretical Literature Review
2.1.1. Definitions and concepts
2.1.2. Sustainable livelihood framework
2.2. Empirical Review
2.2.1. Microfinance and its role in economic development
2.2.2. The role of microfinance on poverty reduction
2.2.3. Role of microfinance on livelihoods
2.3. Null Hypothesis
3. METHODOLOGY
3.1. Description of the Study Area
3.2. Type of Research Design
3.3. Data Sources and Types
3.4. Method of Data Collection
3.5. Sampling Techniques and sample size
3.6. Methods of Data Analysis
3.6.1. Econometric Method of data analysis
4. RESULT AND DISCUSSION
4.1. Demographic Characteristics of Sample Respondents
4.1.1. Sex sample respondents
4.1.2. Religion and Marital Status of Sample Households
4.1.3. Age, family size and age composition of sample households
4.1.4. Educational Status of Sample Household Heads
4.2. Major Sources of Household Income
4.3. Loan Purpose and Income Generating Activities of the Households
4.4. Household Income and Expenditure
4.5. Challenges of the Households in Credit Participation
4.5.1. Challenges related to transportation
4.5.2. Challenges related to the size of the loan and repayment time (due time)
4.6 Child Education and the Microfinance Services
4.6.1 Children Access to Education
4.6.2. Expenditure on Education
4.7. Logistic Regression
5..CONCLUSION AND RECOMMENDATIONS
5.1. Conclusion
5.2. Recommendations
Research Objectives and Themes
The research primarily aims to identify the role of the Oromia Credit and Saving Share Company (OCSSCO) in improving household livelihoods in Agaro town and to assess the challenges faced by users during credit participation. It seeks to understand how access to microfinance services contributes to income diversification, household welfare, and support for child education among the local rural and urban population.
- Contribution of microfinance services to household income and economic welfare.
- Barriers and challenges faced by households in accessing microfinance credit.
- Analysis of loan purposes and the engagement of households in income-generating activities.
- Evaluation of the impact of microfinance on child education and household expenditure patterns.
- Socio-demographic determinants of credit participation using econometric modeling.
Excerpt from the Book
4.5.1. Challenges related to transportation
According to the survey, OCSSCO is found in the town while most of the clients are farming community in the rural areas. This is a challenge for these farmers to reach on time to get the service in the town. As they said and as the researchers seen practically, there is no a facilitated road which link them with the town in which OCSSCO is operating. In spite of this, if the clients arrive late they have been punished for being late. This is a double challenge for them; they travel long journey on their foot; subsequently, they are punished economically for being late.
Chapter Summaries
1. INTRODUCTION: Provides an overview of the microfinance landscape in Ethiopia and the study's specific focus on OCSSCO in Agaro town, outlining the problem, objectives, and significance of the research.
2. LITERATURE REVIEW: Examines theoretical and empirical perspectives on microfinance, including definitions, the sustainable livelihood framework, and existing evidence on the role of microfinance in poverty reduction and livelihood improvement.
3. METHODOLOGY: Details the research design, data collection methods, study area description, sampling techniques, and the econometric model used to analyze the factors affecting credit participation.
4. RESULT AND DISCUSSION: Presents the findings regarding demographic characteristics, income sources, credit usage, challenges in accessing services, and the impact of microfinance on household expenditures, specifically regarding child education.
5..CONCLUSION AND RECOMMENDATIONS: Summarizes the key findings of the study and proposes practical recommendations for OCSSCO and policymakers to improve service delivery and better support rural livelihoods.
Keywords
Microfinance, OCSSCO, Livelihood, Household Income, Agaro town, Credit Participation, Poverty Reduction, Economic Development, Rural Development, Financial Services, Loan Purpose, Logistic Regression, Child Education, Ethiopia, Asset Ownership
Frequently Asked Questions
What is the core focus of this research paper?
The paper examines the role of Microfinance Institutions, specifically OCSSCO in Agaro town, in improving household livelihoods through the provision of credit services.
What are the primary thematic areas explored in this work?
The work covers household income generation, credit access challenges, socio-demographic factors of participants, and the impact of microfinance on child education and expenditure patterns.
What is the ultimate goal of the research?
The primary objective is to identify how OCSSCO contributes to livelihood improvements and to evaluate the specific obstacles households face when participating in these credit programs.
Which scientific methods were employed for data analysis?
The study utilized both descriptive and inferential statistics, including t-tests, chi-square analysis, and a logistic regression model to determine factors influencing credit participation.
What does the main body of the research address?
The main body focuses on data results concerning the demographic profiles of respondents, income sources, the purposes of loans taken, and comparative analyses between beneficiaries and non-beneficiaries.
Which key terms define the scope of the study?
Key terms include Microfinance, OCSSCO, Livelihood, Credit Participation, Poverty Reduction, and Household Welfare.
How does the OCSSCO loan size impact business activities according to the respondents?
Respondents frequently reported that the loan size provided by OCSSCO is insufficient to cover high-investment business activities, leading beneficiaries to prioritize lower-cost, small-scale activities.
What is the significance of "group responsibility" in the OCSSCO program?
Group responsibility acts as a guarantee for loans; however, it poses a challenge as group members may be forced to pay on behalf of others if a member defaults, leading to potential social and economic strain.
How does participation in microfinance affect child education?
The study found that microfinance beneficiaries tend to have higher expenditure on child education, indicating that improved household income enables better access to schooling for children.
- Citar trabajo
- Ayalew Sida (Autor), 2013, The role of microfanance institutions in improving livelihood, Múnich, GRIN Verlag, https://www.grin.com/document/278538
