WACHEMO UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF PUBLIC ADMINISRATION AND DEVELOPMENT MANAGEMENT

ASSESSMENT OF THE ROLEOF MICRO-FINANCE INSTITUTION FOR SOCIO –ECONOMIC

EMPOREMENT OF WOMEN IN CASE OF HOSANNA TOWN ADMINISTRATION

A SENIOR ESSAY PROPOSAL SUBMIT TO DEPARTMENT OF PUBLIC ADMINISTRATION

AND DEVELOPMENT MANAGEMENT IN PARTIAL FULFILMENT OF THE REQUIREMENT
FOR BACHELOR OF ARTS DEGREE IN PUBLIC ADMINISTRATION AND DEVELOPMENT
MANAGEMENTMANAGEMENT

BY; ANTENEH BELAY

ADVISOR; LAPISO E.[MS]

HOSANNA ETHIOPIA
MARCH 2024

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LIST OF ABBREVIATION AND ACRONYMS

MF Micro finance
HMFI hosanna Micro finance Institution
UNDP United Nation Development Program
MTDP Market Town Development project
DECSI Dedebit Credit and Saving Institution
ONRS Oromia national regional state
NGO Non-governmental organization

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Table of Contents page

LIST OF ABBREVIATION AND ACRONYMS.................................................................................2

CHAPTER ONE..........................................................................................................................5
1.INTRODUCTION....................................................................................................................5
1.1. Background of the Study................................................................................................5
1.2. Statement of the Problem...............................................................................................6
1.3 Research Question...............................................................................................................7
1.4 Objective of the Study.....................................................................................................8
1.4.1 General Objectives............................................................................................................8
1.4.2 Specific Objective..............................................................................................................8
1.5 Significance of the Study................................................................................................8
1.6 Scope of the Study...........................................................................................................8
1.7 Limitation of the study...................................................................................................9
1.8. Organization of the paper..................................................................................................9
CHAPTER TWO.......................................................................................................................10
2 .REVIEWSOF RELATED
LITERATURE...................................................................... 10
2.1 Theoretical Literature Review......................................................................................10
2.1.1 Micro Finance.................................................................................................................10
2.1.2 Microfinance in Ethiopia..........................................................................................11
2.1.3 Economic Impact of Microfinance...........................................................................11
2.1.4 Social Impact of Microfinance.................................................................................11
2.2. EMPIRICAL LITERATURE..........................................................................................12
CHAPTER THREE.................................................................................................................13
3. RESEARCH METHODOLOGY................................................................................................13
3.1. Description of the study area...........................................................................................13
3.2.Research Approche............................................................................................................13

3.2. 1. Design of the Study.......................................................................................................13

3.2.2 Method Data Collection.................................................................................................13

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 3.2.3. Sampling and sampling Techniques.............................................................................14
3.3. Data source........................................................................................................................14
3.3.1. Primary data..................................................................................................................14
3.3.2. Secondary data...............................................................................................................14
3.4. Data collection instruments.............................................................................................15
3.5.Methods of data analysis, presentation and interpretation...........................................15

3.6. Ethical Consideration...................................................................................................16

3.7. WORK PLAN AND BUDGET…………………………………………………………………………………………16
3.7.1 WORK PLAN…………………………………………………………………………16

3.7.2 BUDGET PLAN………………………………………………………………………17

REFERENCE…………………………………………………………………………………..19

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 CHAPTER ONE
1. INTRODUCTION

1.1. Background of the Study

In Ethiopia MF was occurred in 1996 and currently it reached about 35 MF in Ethiopia (Malik
and Lumen, 2005) a movement whose impartial a world in which is as many poor and near poor
households as possible have permanent access to an appropriate range of high quality financial
services. Including not just credit only but also saving, insurance& fund transfer. Many of those
who promote economic microfinance generally believe that such access with help poor people
out of poverty including participants in micro credit summit campaign for other, microfinance is
away to promote economic development, employment and growth through the support of micro-
entrepreneurs and small business ( Linthorst 2013).
Microfinance refers to a variety of financial services that target low-income clients, particularly
women’s, since the clients of microfinance institution have low income and often have limits of
access to other financial services, micro finance products tend to be for small monetary amount
than traditional financial services, the services includes, loans, saving, insurances and
remittances,( Linthorst 2013). Microfinance institutions currently operate in over 100 countries,
serving more than 92million clients Microfinance institution is a source of financial services for
entrepreneurs and small business lacking access to banking and relates services.

There are two mechanisms for the delivering of financial strives such clients are Relationship
base banking for in individual entrepreneurs and small business and Group based models where
several entrepreneurs come together to apply for loans and other services.
(Linthorst,2007).Empowerment is based on the idea that giving employees skill, resources,
authority, opportunity, motivation, as well holding them responsible accountable for outcome of

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their actions, well contribute to their competence and satisfaction. (Dunford2013). It has
experienced impressive out realm growth in the last period of time of its operation, its leading
activities have witnessed positive socio-economic impact upon its clients through helping the
poor increase their income, asset positions and their empowerment status currently people that
are lived in the study town poor andworkless women are year to year increase. Therefore, this
research proposal will be conducted on role of MFI for socio-economic empowerment of women
in study area.

1.2. Statement of the Problem

According to the World Bank’s gender statistics database, women have a higher unemployment
rate than men in virtually every country. In general, women also make up the majority of the
lower paid, unorganized informal sector of most economies. These statistics are used to justify
giving priority and increasing women’s access to financial services on the grounds that women
are relatively more disadvantaged than men (Narayan, 2002).

Ethiopians’ women who constitute about 50% of the population and who consists s the majority
of the unemployed segment of the population are the most affected by poverty. Since the
majority of Ethiopian women live in areas where basic social services such as health, education
and other infrastructures are non-existent, disease, malnutrition, and illiteracy is seriously
affecting their and the life of their children (Tesfay, 2003).

Ethiopia is one of the poorest countries in the world, with annual-per capital income of US $
505in2015. The united nation development programs-human development report for 2007-2008
ranked Ethiopia as 169thout of 177 countries on the human development index. The average life
expectancy after birth is only 52 years. (UNDP, 1995).

Hence hosanna district microfinance is one of the largest microfinance institutions operating in
central Ethiopia region started in licensed 2000 E.C at that time this micro finance covers 9 zonal
districts. Currently the study area is the capital city of hadiya zone will be hosanna town it has
started its operations in and has become licensed micro finance in 2009 E.C to separate from the
hosanna district of the central Ethiopia region. However the primary mission hosanna town
microfinance is improved the economic situation of low income, productive poor people in
hosanna town and saving service and achieved remarkable performance in its micro-finance.

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Generally, this studydeals with to assess the role of micro-finance for socio-economic
empowerment of women and subsequently in empowering them to play an active role in the
economic, political and socio-cultural sphere in the study area.

Therefore economic empowerment approach attributes women’s subordination to lack of

economic power. It focuses on improving women’s control over material resources and
strengthening women’s economic security. Women may work in a range of areas, including
savings and credit training and skills development, new technologies or marketing as well as
provide such supports as child care, health services, literary programs and legal education and
aid. The consciousness raising approach asserts that women’s empowerment requires awareness
of the complex factors causing women’s subordination in addition to this in the study area

However the women in the study area in social problem this means Islamic women cannot
participate saving and credit because of interest but the award women to participate microfinance
institution those participated women change the life style by income, saving, asset accumulation,
decision making power and self-esteem still now this religious problem is occurred because most
of Islamic women’s is not participate credit and saving with interest so that the purpose of this
paper is to solve this problems and linkage of market for buying and selling is another problem.
The implication of women’s access to MFI services need a critical assessment in the study area
as they are constrained by the norms, beliefs, customs and values through which societies
differentiate between women and men. Conversely, it is also argued that Microfinance
Institutions are extorting money from poor women through high interest rates and causing higher
social pressure. Therefore, micro finance office at hosanna town is parts of micro finance those
are socio-economic empowerment of women. So the researcher attempted to assess the role of
micro-finance for socio-economic empowerment of women at hosanna town. (hosannaMFI
office document 2019).

1.3 Research Question

From this point of view researcher want to examine the following questioner of the study area

1. What is the role of micro finance on women’s social empowerment in the study area?
2. What is the challenge of micro finance institution with the client in the study area?
3. Does MFI change women’s socio-economicempowerment in the study area

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 1.4Objective of the Study

1.4.1 General Objectives

The General objectives of the study isto assess the role of micro-finance for socio-economic
empowerment of women in hosanna Town in the case of hosanna credit and saving institution
central Ethiopia Region

1.4.2 Specific Objective

 To identify the role of microfinance for social empowerment of women in the study area
 To assess the challenges of women clients with microfinance institutions in the study area.
 To evaluate the role of micro finance for economic empowerment of women in the study
area.

1.5 Significance of the Study

The findings of the study will be believe to show economic and social benefits of micro finance
delivery to women in addition to its impacts in enhancing their awareness and knowledge.
Furthermore the study also identifies the challenges women face with micro to conducted further
studies on the subjects. Again the results of the study would serve as a source of information for
people that need to know the role of micro finance institutions in the socio-economic
empowerment of women. Microfinance has come to play a major role in many gender and
development strategies, because of its direct relationship to both poverty alleviation and to the
socio-economic empowerment of women.

1.6 Scopeof the Study

This research is conduct to assess the role of micro finance for socio-economic empowerment of
women in hosanna Town in the case of BMFI. The study aim is exploring the perceived
prospects and challenges of BMFI in improving the socio-economic empowerment of women in
hosannaTown. The women outside the Town are not considered under the investigation, because
of limited availability of resources and time to undertake the study on a wider scale the study

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utilizes cross sectional data. Which means observation of different individuals at a given time
due to limited time and financial resources the study covers hosanna townMFI limiting to 54
sample respondent has taken which only represent the study area. Since, to assess the role of
micro finance for socio-economic empowerment of women mainly because of the availability of
a wide range of alternative indicators at the household, individual and community level, this
study also limit on quality of information. Because quality of information is depend on the
willingness, knowledge and recalling capacity of respondents. However, maximum effort made
to gather reliable information by convincing from respondentto address the objectives of the
study.

1.7 Limitation of the study

 Absence of the sources or written document that show all data required

 Un willingness of society to give the information they asked

 Lack of time and money

1.8. Organization of the paper

This study will be consist three chapter which deal with different titles. Chapter one deal with
introduction about whole study which includes background of the study, statement of the
problem, research objectives, research question scope of the study and significance of the study
as well as organization of paper. Chapter two deal with literature review form different source
like previously worked and different published materials. Chapter three deals with methodology
the study which include study area, research approach, design of the study sampling and
sampling techniques, data source data collection, andMethods of data analysis and presentation.

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CHAPTER TWO
2 REVIEWSOF RELATED LITERATURE
2.1 Theoretical Literature Review
The term empowerment is used to self-reliance and self–respect in order to enable each person
reach his or her God given potential (Kuhn, 2002).They also state that temperament is about
change, choice and power, Empowerment is also considered as process of change by which
individuals or groups with little or no power gain the power and ability to make chooses that
affect the lives. Empowerment is also defined as processes through women are able to transform
their self-perception equivalent to alchemy of visibly transforming gender roles; empowerment
generally involves change at three broad levels within the household, within the community, at
broader institutional or policymaking level (Zafar, 2002).

The idea of power at a root of the term empowerment power might operate indifferent ways
(OaklandBadar, 2004) Power involves people organizing with a common purpose or common
understanding to achieve collective goals whereas power within refers to self- confidence, self-
awareness and assertiveness. Power tends to accrue to those who control or are able to influence
the belief, values, attitudes, behaviours and resources that govern social relation at both public
and private levels. Empowerment of women processes tends to identify power in terms of the
capacity ofwomen to increase their own self-reliance and internal strength and gain use power in
alternatives constructive ways (Badr, 2004).

2.1.1 Micro Finance

Micro fiancé is a term used to refer to the activity of provision of financial services to client who
are exclude from the traditional system on account of their lower economic status. The financial
services were the most commonly take the form of loan and creating banking system which is
based on mutual trust (Kabeer, 2005).

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Micro-credit programmers aimed at empowering women have become popular among donors
and NGO’S Development policies with the approach of women’s empowerment through women
organizing-for grater self-reliance has also resulted in a change of polices for the enhancement of
women’s economic role. Since micro finance organization has financial focus, they are expected
to impact the lives of the poor.Moyoux2005)

2.1.2 Microfinance in Ethiopia

Formally in Ethiopia started in 1994-1995. In Particular, the licensing and supervision of
institution proclamation of the government encouraged the spread of Institutions (BMFIs) in both
rural and urban areas as it authorized them among other Microfinance, to legally Accept deposits
from the general public (hence diversify sources of funds), to draw and accept drafts, and to
manage funds for the Micro financing business. Currently, there are 29 licensed MFIs reaching
about 2.2million active borrowers with an outstanding loan portfolio of approximately 4.6 billion
birr (Eshetu,2000) Considering the potential demand, particularly in rural areas, this satisfies
only on significant proportion (Ruralpovertyportal.org, 2003).

2.1.3 Economic Impact of Microfinance

Women’s accesses to credit are financially believed to result in their economic empowerment.
BMFI a result, the provision of MF to women has been called for by various international and
national organizations in light of their productive role for economic development and women’s
rights. However, man sill. Question the empowering capacity of credit in relation to the
economic, social& political conditions and of women (Moyoux,2002).The impact of MF on
income has been observed to be variable. It appears that for the majority to borrowers in come
increases is small and even in some cases negative. This is due to the fact that most women
invest in addition, women’s choices and ability to increases to other resource for investment in
household responsibility and lack of mobility.

2.1.4 Social Impact of Microfinance

In addition to economic impact, social changes also result from the work of microfinance
organization (Kaber2001) the delivery of MF is expected in group can achieve what might not be
achievable individually. MF organization strategies provide the poor the possibility or
economically imposed relationships of this allows for meeting with others of similar experience

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and share knowledge. Such practices in effect are believed to empower them both individually
and collectively (kaber,1999).

2.2. EMPIRICAL LITERATURE

In spite of the above theoretical recognition management practice and challengers there are
different studies which describes about compensation management practice and challenges in
this section will be made to assess the empirical studies conducted by different authors.

Tsehay and Mengistu2002) found out that microfinance interventions have brought
improvements in economic status and empowerment of poor women microfinance participants.
Similarly Tesfay (2003) found, micro-finance has played an immense role towards better the
position of women in terms improved attitude and respect of their spouses on a case study of
Dedebit Credit and Saving institution.

For instance, Mengstu (1998) conducted a study on credit service administration

under the microenterprise project. He noted that the increase in the number of program
beneficiaries was an indicator of the assistance of the program to employment creation. He also
indicated the increase in the level of credit ceiling as well as the use of saving accounts as
indicators of the growth of microenterprises towards the formal sector. With respect to loan
repayment, Mengstu (1998) found out a rate as high as 92%.

Also Solomon (1996) conducted a survey on 65 beneficiaries of microenterprise financing

scheme of Development Bank of Ethiopia, at Debre-berhan branch. His objective was to evaluate
Market Town Development project (MTDP) by focusing on the performance of loan status under
group liability and to assess the socio-economic empowerment of women in general.

Another case study of Dedebit Credit and Saving Institution (DECSI) by Meehan (2002)
analyzed the impact of microcredit provision at household level in rural Tigray. The study came
up with the finding that credit provisions have had a positive impact on alleviating poverty in the
study area. The impact was absorbed at least in the short term by increasing economic activities
and income levels of the beneficiaries but diminishes to sustain a long run positive impact.

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However, some of the above studies show that the rise in economic empowerments as a result of
the microfinance intervention was not significant (Alemayehu, 2008); voluntary savings did not
expand accordingly; sustainable increase in income was recorded in urban than in rural and that
wealth, gender and activity differentials are important for the effectiveness of the programs was
(Meehan 2002), and so emphasized in all of the results of impact assessment studies.

CHAPTER THREE
3. RESEARCH METHODOLOGY

3.1. Description of the study area

The study will be conducted in Hosanna Town located is a in central Ethiopia. Which is located
232 km away from Addis Ababa in the southern direction? It is situated 1017-degree North
latitude 3700-degree East longitude. The elevation of hosanna town administration ranges from
1501-2500 m.a.s.l. The climate is warm and temperate in hosanna town. In winter there are much
less rainfall than in summer. In the study area the annual rainfall pattern is starting from June to
September which receives 1001-2000mm and the mean annual temperature range is 15-23 0c.

3.2. Research Approach

The approach of the study will be mixedmethods it is very important for the validation of finding
in terms of accuracy and checking the personal bias in the research. Specific instrument this
study quantitative approach is dominant one because in my finding it is important to save time,
resource and to generalize the total population in my finding. Qualitative methods are used
validated those quantitative data and to identify the role of micro finance in empowerment of
women which are not gained with survey. Hence these two methods were used to provide
comprehensive analysis of the problem (Jane and Lewis, 2003).

3.2. 1. Design of the Study

The main purpose of this research isto assess the role of micro finance for socio economic
empowerment of women. Thus descriptive research designs is to suggest and take related
literature and carrying out in gathering the basic information (Roger and Nell, 2003)

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3.2.2 Method Data Collection
In order to explore deep information for the study conduct, the researcher will be collect through
primary and secondary source of data. The primary data collection is collect through interview
and questioners. Secondary data is collect from published and unpublished materials,

3.2.3. Sampling and sampling Techniques

The study population is constitute women’s who benefited from BMFI in hosanna town. This
study will be conduct in hosanna town and hosanna Micro finance institutions. In this study the
researcher is use non probability sampling method specifically judgmental sampling technique is
applied because, in this case the researcher has full freedom in choosing his sample according to
his wished & desires, to get appropriate information from the household or my respondents. The
reason for researcher has been used non probability sampling to get accurate data from related
organization since the study conducted on specific area. The researcher are also collect data or
information any customer of in that there institution. Women’s population who benefit from
BMFI microfinance institutions is 82 hosanna microfinance institutions. This study is includes
54 sample size the reason for using only this amount of respondents is due to the fact that there is
limitation of time as well as financial resource. As result of this is a kind of rate analysis
techniques or using different source and tools that can help us generate multiple data. According
to the Yamane formula of sample [1967]

n=N/1+N (e) 2

Where n= sample size

N= Number of total population

e= error term

n=82/1+82(0.08)2=54

3.3. Data source

The researcher will be both primary and secondary source of data

3.3.1. Primary data

Primary data will be collect from the target population through questionnaire and interview.

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3.3.2. Secondary data
Secondary data will be collect from different published book, document of institution, research
publication. The reason for use secondary sources is it supplements and validates the information
obtained from primary sources.

3.4. Data collection instruments

A. Questionnaire; to generated numerical (quantitative data) such as table and percentage the
researcher isused survey method based on close end questionnaire, respondent of questionnaire is
employer in the institution .

B. Interview; Qualitative method collect such as interview with some member in BMFI. In
addition it was used to key information interview with very knowledgeable people in this
regarded. So, the researcher is select and used the semi-structured interview. Semi-structured
interviewing was perhaps the most common type of interview used in qualitative social research.
They consisted of open-end and flexible questions the respondent for interview was highly
expert or experienced people who have good information about BMFI

3.5. Methods of data Analysis, presentation and Interpretation

The data collect from the respondents is analyze by using quantitative and qualitative techniques.
The response of the respondents is presented by using tableandpercentages.

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3.6. Ethical Consideration

Confidentialityand privacy are some of the most corner stone of field research activities in order
to get relevant and appropriate data. The researcher will assure the purpose of the research paper
and confidentiality of any that will be information gathered through questionnaire on the
introductory part of the paper. During data gathering some respondents may will not show
willingness to respond to the questionnaire but, the will researcher will approach and explaine
the purpose and assured the confidentiality and finally they may be positive to give response.

3.7. WORK PLAN AND BUDGET

3.7.1 Work plan

Overall research activities will be under take based on the following time schedule.

Lists of Month

No Activity Nov Dec Jan Feb Mar Apr May Jun

1 Title
selection

2 Title
approval

3 Literature
review

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 4 Proposal
writing

5 Proposal first √
draft
submission

6 Proposal √
final draft
submission

7 Proposal √
paper
presentation

8 Data
collection
and process

9 Data analysis √
and
interpretation

10 First draft √
report
writing

11 Final draft √
report
writing

12 Paper √
presentation

3.7.2 Budget plan

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S NO Cost item Unit Out put Cost unit price Total
measurement

1 Pen Unit 1 25 25

2 Paper Page 45 2 90

3 Ruler Unit 1 15 15

4 Binding cost Unit 1 35 35

5 Transportation Round 4 10 40

6 Telephone Per hour 1 5 5

7 Printer Page 20 3 60

8 Photocopy Page 20 3 60

9 Internet Per hour 2 4 8

10 Flash Birr 1 250 250

11 Questionnaires Page 48 0.5 24

duplication

12 Miscellaneous 150
expense

Total 762

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Cheston, susy and Lisa,Kuhn, (2002) Empowerment and Gender mainstreaming international in
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Cliff, Tony.(1984) Class struggle and women liberation in London Cromwell.

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Eshetu, Debabu, (2000). Patriarchy in Ethiopia, unpublished.

Finna (1999) Micro finance hand book the international bank for reconstruction and
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Finna (1999). Measuring brand equity access product and market in California

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Getanech, G (2010). Empowerment of women in Rural Ethiopia

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Idigas, (2006).Empowerment through enterprise a training manual fornon-governmental

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