Impact of micro finance institutions on livelihood of borrowers poverty reduction: Evidence from Tigray, Ethiopia

Abstract

The aim of the study is to assess the impact of Micro-Finance institutions in urban poverty reduction with special referenc of Dedebit Credit and Saving Institution, Tigray, Ethiopia. Primary survey data has been applied with an aggregate sample of 244 respondents (128 non-participant household head and 116 participated in micro-finance) selected using stratified random sampling. The self-administrative questionnaires was arranged and conveyed for both groups with the same question. Based on the logistic regression model; household heads who are older in their age, more education, religion (other than Muslim), single household head, absence of remittance, and pull motivation are more likely to receive financial service. In addition, based on the propensity score matching (four algorithms), the study found that being participated in micro-finance, the outcomes like sales, profit, income of households, capital asset, savings, expenditure on clothes of households, children schooling expenditure, food items has a positive and significant change except for employment creation and health care. The institution benefits on families' pay and consumption demonstrate a more positive flag of the significance, which intended for enhancing independent work openings.