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Influence of microfinance services On farm households income: the case Of oromia credit and saving share Company kuyu Branch Ethiopia

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  • Kebede, Duga
  • Bezabih, Emana
  • Gezahegn, Ayele

Abstract

The paper analyzes the influence of micro finance services in improving economic performance of farm households using data collected from 100 randomly selected households. Descriptive analysis of the changes in income level between the baseline and survey year was made whereas binary logit model was used to analyze the determinant of incremental income. The results revealed the existence of improvement in the household income of the clientèles. Micro finance service related variables such as proper utilization of the disbursed loan, average loan size, appropriateness of loan disbursement schedule, and access to required amount of loan were found to be significant factors influencing the incremental income of the clientèle. Other determining factors include land holding, shortage of drought animals, and distance to market. The policy implications of the results tend to emphasize on the importance of supervision of loan service, improved loan schedules, proper identification of feasible business plan, income diversification of the clientèle, and strengthening market access

Suggested Citation

  • Kebede, Duga & Bezabih, Emana & Gezahegn, Ayele, 2006. "Influence of microfinance services On farm households income: the case Of oromia credit and saving share Company kuyu Branch Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 11(2), pages 105-105, June.
    • Handle: RePEc:ags:eeaeje:249849
    DOI: 10.22004/ag.econ.249849
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    1. Ahmed, Akhter U. & Rashid, Shahidur & Sharma, Manohar & Zeller, Manfred, 2001. "Group-based financial institutions for the rural poor in Bangladesh: an institutional- and household-level analysis," Research reports 120, International Food Policy Research Institute (IFPRI).
    2. Heidhues, Franz & Schrieder, Gertrud & Zeller, Manfred & von Braun, Joachim, 1997. "Rural finance for food security for the poor," Food policy reviews 4, International Food Policy Research Institute (IFPRI).
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