IMPACT OF OMO-MICROFINANCE INSTITUTIONS ON WOMEN’S ECONOMIC EMPOWERMENT IN Wolayta zone

Abstract

Microfinance institution program plays an important role in women’s economic empowerment enhancing independent income generation, prosperity of asset accumulation, smoothing household expenditure, mobilizing saving and entrepreneur development . Since the impact of MFIs services on women economic empowerment has no common consensus among different academicians, some of them argued it has positive and some other argued has negative impact. Therefore, the study was attempted to assess the economic empowerment of women’s through impact of OMFIs program conducted in Wolaita Zone Damot Gale and Damot Pullasa woreda districts, SNNP, Ethiopia by using primary data through structured questionnaire. The study includes a total of 285 subjects where convenient sampling was used to selected two Woreda randomly and then stratified random sampling techniques is used to group sample population from total study population of 1096 due to heterogeneity of population by the intended purpose borrowing; agricultural, commercial and small microenterprise service economic activities. The primary data collected by interviewing 285 rural respondents using questionnaire in addition to primary data that 255 respondents correctly stated the questionnaire. A descriptive statistics and multiple logistic regression analysis are employed to analyze the impact of OMFIs on women’s economic empowerment. The logistic marginal effect result showed that positive change of women economic empowerment indicators after intervention to OMFIs program; independent income generation(9.81e-04%), asset(7.38e-04%), saving(1.6*10 -2 %), expenditure(5.96e-04%), business profit(2.49%) and employment opportunity(93.07%). From the analysis result, the result showed that OMFIs services acting act as a key fulcrum to women economic empowerment through socio-demographic variables that the yet negative impact variables become positive impact after intervention to OMFIs program. To test fitness of model the data in regression analysis results the various test models were used such as t-test and chi-2 test for the descriptive frequency statistics, and Hosmer-Lemeshow, Wald and log likelihood ratio test models were used for fitness of the data in logistic regression result after model specification test. To determine reliability of data the Cronbach”s alpha value was determined as 0.814 in which data is reliable before administration of questionnaires to respondents. Since total of ten explanatory variables; four socio-demographic and six potential economic explanatory variables were included in the regression, model specification, multicollinearity and heteroskedasticity test are useful to determine interdependence of explanatory xiv variables and normality of error term test are necessary to test significance of omitted variables. The resultant change of variation during intervention on women’s economic empowerment explained about 80.02% by OMFIs program through mentioned explanatory variables that the model fit data very well at p-value of, p=0.000 and chi-square of 247.34.