Impact Assessment of the Microfinance Programme in Amhara Region of Ethiopia
Inspite of rapid expansion of microfinance services by ACSI in the last one decade or so in the Amhara region of Northern Ethiopia, currently reaching more than 550,000 credit clients, there has been little or serious attempt to evaluate the impact of such services. The objective of the study was to see if the institutional vision of bringing about positive impact on the lives of the poor is being attained, and also how to improve on the design of financial products with a view to ‘improve’ impact.
The AIMS (Assessing the Impact of Micro-enterprise Services) conceptual framework (of USAID) used for the study, departs from the conventional approach in that it starts with the household rather than the enterprise. The model recognizes that loan funds to poor households are ‘fungible’ and can be allocated to any activity in the household economic portfolio, and the micro-enterprise is embedded in the household economy, representing only one of the household’s production, consumption, and investment activities. Both ‘quantitative’ and ‘qualitative’ methods were used to collect data from over 1600 clients and non-clients and triangulate results to get full picture.
Important conclusions are that:
- The micro-finance service is indeed having clear impact: improving the food security situation, the health status, educating the children, creating additional assets (improved housing, etc), as well as impacting on the ‘empowerment’ situation of the marginalized;
- finance for ‘micro-enterprise’ is used for various problems in the household, including most importantly, for consumption smoothing, and programmes need to consider this;
- Micro-credit cannot be the only intervention on poverty, and other interventions should also accompany it, more importantly: Business Development Service, health education, etc.