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Gender, Poverty and Micro-enterprise Services in Ethiopia: Why Only Few Women are Joining?

This paper examines the need for, and the success of, micro-enterprise programs in Ethiopia, with a special focus on their outreach to women. The paper discusses the role that micro-enterprise can play in alleviating poverty in Ethiopia, reasons why micro-enterprises target women, and the relationship between empowerment, resources, agency and achievements. It also describes the features of the “group guarantee-lending model” and examines whether the program has achieved the empowerment objective and successfully extended microfinance to poor women as well as looking at the pros and cons of the group-lending methodology.

The report finds the impediments to women accessing the program include self-selection of group members that leads to the exclusion of the very poor and unfavourable factors (such as terms and conditions, loan size, low number of female loan officers, lack of business development services support, aversion to risk, and shortage of time).

The paper states that microfinance helps alleviate poverty by enhancing human capital, reducing vulnerability, and providing savings and insurance services and emergency loans. In particular it lists the following positive features of the “self-help approach” – they are savings-based, the pride of ownership and autonomy, the integrated services of finance and business development, economies of scale, and sustainability.

The paper concludes that for micro-enterprise services to be successful in poorer areas, there is a need for improvement in rural infrastructure and education about microfinance.

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