mpact of Microfinance on Income and Employment of Women in Jigjiga, Ethiopia

Alam, P. and Azad, I. (2021) Impact of Microfinance on Income and Employment of Women in Jigjiga, Ethiopia, International Journal of Economics and Business Administration, IX (1) pp. 373-381.

The authors started by explaining the contribution of microfinance to  employment creation and women’s economic empowerment. Microfinancing is the program that aims to address the low-income earning community through the provision of credit, saving, money transfer and insurance services. This not only benefits  women personally but also indirectly supports caregivers and their families and widens the opportunity for a better life. 

 The study used a quantitative research approach and data was collected through structured survey questionnaires to assess the impact of microfinance on the income and employment of women. For data analysis, the author used descriptive statistics and paired t-test methods in alignment with the Wilcoxon signed rank test. Using a non-probabilistic sampling method, the author selected 151 sample respondents from the study area.

According to the findings, access to microfinance services has a significant impact on the income of the participants. Significant differences in terms of monthly income in many households before  and after  access to microfinance services were noted. This  is directly linked to the employment opportunities facilitated by microfinance services. 

Widening employment opportunities is a crucial step towards poverty reduction and  provides the low-income earning community a means of earning, improving their livelihood and covering household consumption. Microfinance relieves poverty and improves  the livelihood of women  who often struggle to find jobs due to their educational level and other socio-economic impediments. However, through microfinance services, they can  start their own business, expand an existing one or  get a sustainable income. It provides neglected groups and the financially destitute  with credit services, saving services and financial management skills.

However, the study faced some challenges:  its reach was  limited to the rural towns and the services were  not supported by well defined policy and legal frameworks. Hence, microfinance should  develop an inclusive approach to deliver their services for the poorest communities in the very rural areas using a selection mechanism scheme   and devise innovative products and services to  enable  regulation.