ASSESSING THE IMPACT OF MICROFINANCE ON THE LIVELIHOOD OF ECONOMICALLY ACTIVE URBAN POOR: THE CASE OF MICRO AND SMALL ENTERPRISES IN INTEGRATED HOUSING DEVELOPMENT PROJECT

Abstract

This study is a Descriptive research and it was conducted in the Hawassa city. The main objective of the study was assessing the impacts of Omo Micro-finance and the concerned government institutions intervention on the livelihood of individual members of MSEs and the status of their enterprises working in the Hawassa city Housing Development Project. The study employed a cross-sectional survey design in the context of both quantitative and qualitative research methods. Primary and secondary data were utilized in the study. Primary data were collected by using semi-structured questionnaires, observation, key informant interviews, and focus group discussions. The field survey was conducted with a sample size of one hundred twenty-four individuals selected by quota and proportional random sampling techniques. Data were analyzed through descriptive statistics by using the SPSS program, and by content analysis. The findings of the study discloses the contribution of micro finance for income increment and diversification of income sources, reduction of income inequalities, increase in consumption, improved living condition in terms of purchasing household assets, house ownership and access to medical services. Another significant contribution of micro finance intervention is increase in trend of capital accumulation in the form of savings, and the creation of employment opportunities. On the other hand, micro finance services have limited impact in the entrepreneurial development of micro enterprises in sustaining and improving MSEs. Profitability in relation with enhancing external market linkages, implications for regulatory aspects of MFIs’ and on concerned stakeholders’ support for MSEs services such as reviewing loan ceiling, and repayment terms, reducing group size, reviewing members’ selection procedures, and continuous follow-up of enterprises’ performance in a coordinated manner. Generally the outcome of the study has established that MF and supporting institutions’ interventions on MSEs have shown improvements in terms of increase in income from enterprises, access to life-enhancing facilities, employment opportunities, and saving status of the working urban poor in the study area .