The role of microfinance institutions on poverty reduction in Ethiopia: the case of Oromia Credit and Saving Share Company at Welmera district

Abstract

The purpose of this study is to assess the contribution of Oromia Credit and Saving Share Company microfinance institution on poverty alleviation in Welmera district, Oromia Special Zone Surrounding Finfine, Oromia Regional State, Ethiopia. Both random and purposive sampling techniques were used for data collection. Three hundred and fifty-seven respondents were selected from twelve different villages for the data collection. The study used a binary logistic regression to identify the key determinants of the income improvement of respondents. The findings confirmed that education level, voluntary saving, and utilization of loan for the intended purposes are statistically significant and positively contributed to the income improvement of the respondents in the study area. The finding revealed that most of the respondents' income improved after they joined the program which impacted positively in improving their standards of living.