1.1 Overview
1.1.1 Background
Ethiopia is the second most highly populated country in Africa after Nigeria. Although it has the fastest-growing economy in the region, the annual per capita income of Ethiopia is low, 691 USD, and 23.4% of the population was under the poverty line in 2014/15(GTP 2 plan, 2016). To alleviate poverty through employment creation, the government has encouraged domestic saving and private investment. Moreover, increasing access to credit is important to overcoming poverty through job creation and income generation among those who lack of access to credit and other financial services (Derbew, 2015).
Monetary financial institutions (MFIs) give priority to rural poor women because women with access to credit are more likely to increase spending to improve household welfare than men are (Narain, 2009). Women also are more credible in loan repayment than men (Gobezie, 2010). Moreover, labor markets favor of men and most of the productive resources are controlled by men, especially in developing countries. The first mission of the Amhara Credit and Saving Institution (ACSI) is to increase access to credit by poor people in order to improve their productivity and income. ACSI gives special emphasis to women, as women are mostly marginalized and have limited access to financial services (ACSI, 2017).
Women are important contributors to agricultural development and the rural economy in Ethiopia. Women constitute 40% of the world labor force and 43% of the agricultural labor force (Box, 2015). Women are involved in all farm activities in Ethiopia, from clearing of land to harvesting, processing, and marketing of products. Women plant different crops, rear animals, and keep poultry near their homes. In other words, women undertake multiple responsibilities in Ethiopia, working outside the home on farmlands and on non-farm activities as equal as their male counterparts. Women are also involved in activates that men are hardly involved in in Ethiopia, such preparing and providing food to maintain family welfare and, of course, giving birth to children (Fabiyi, Danladi, Akande, & Mahmood, 2007). Just as a bird cannot fly with a single wing, countries that do not include women in their economic, social, and political agendas will be unable to achieve sustainable development.
1.1.2 Problem Statement
Women are the backbone of rural agriculture and the national economy in Ethiopia. They constitute over 50% of the total population in Ethiopia (Tegegne, 2012). To reduce poverty and achieve sustainable development, empowering women is essential. Women’s economic empowerment (WEE) is one of the most important factors contributing to equality between women and men. A specific focus on women is necessary given that women are a majority among economically disadvantaged groups. Therefore, WEE is a priority in promoting gender equality and so as to bring sustainable development (Bayeh, 2016).
In particular, married women have less control over household resources and poor access to productive resources than single women, which hinders their movement towards economic empowerment (Tekaye & Yousuf, 2014).
In rural areas, many women do not have their own land or access to credit and usually engage in day labor. Due to a lack of working capital, women and men do not have equal opportunities to participate in income-generating activities. Women who lack access to credit and capital are more impoverished and have lower quality of life than women who have sufficient access to capital and own land (Tadesse, 2014).
Previous studies have indicated that MFIs have a greater impact on WEE (Eshetu, 2011; Tekaye & Yousuf, 2014) through their effect on women’s income, saving, and decision-making. Researchers have also assessed the association between access to microfinance and WEE. However, studies evaluating the impact of credit specifically on married WEE in West Gojjam are limited. These studies could not separately show the contribution of credit access to women’s income and income earned by other family members. Earlier studies considered household income as an indicator of WEE. Therefore, this study was initiated to fill this research gap by examining the impact ACSI credit access on the economic empowerment of married women, as decisions of married women are more influenced by men than other women and girls. This study also measured additional married women decision-making indicators. This study applied the propensity score matching (PSM) technique to estimate the effect of microcredit access on married WEE in Jabi Tehinan Woreda located in West Gojjam Zone of Amhara Region, Ethiopia.
1.1.3 Objectives of the Study
The main objective of this study was to assess the impact of microcredit access on married WEE. The specific objectives of the study were:
- To estimate the impact of credit access on the saving of married women
- To estimate the impact of credit access on increasing the income of married women
- To identify determinants of married women’s participation in the decision-making process
1.1.4 Scope and Limitation of the Study
Women’s empowerment has many dimensions (i.e. political, sociocultural, economic, etc.), but this research addressed only economic empowerment of married women. ACSI provides financial services in both rural and urban areas, but this study focused on the impact of credit access on rural married women. The study was conducted on married women who are clients and non-clients to ACSI in Amhara regional state, specifically in Jabi Tehinan Woreda.
1.1.5 Significance of the Study
The pace of growth and development increases with the equal participation and mobilization of men and women and by deploying their human talents, knowledge, and skills effectively. However, getting women to participate in social, economic, and political processes is problematic in the case of Ethiopia. Empowering women in all development aspects paves the way towards sustainable development. Thus, increasing women’s access to microcredit is among the policy tools in Ethiopia that can be used to empower women economically. The findings of this study will inform policymakers, politicians, and the government as a whole as to what the next task will be to empower rural women and suggest possible interventions to addresses limitations of empowering women through increasing their access to microcredit in Ethiopia, particularly in Amhara regional state.
1.1.6 Organization of the Chapter
This chapter has been organized into five sections. The first section presents an overview that presents the background of the study, statement of the problem, objective of the study, scope and limitation, and significance of the study. The second section reviews the theoretical and empirical literatures that are related to the impact of credit on WEE. The third section presents the methodology of the study, with emphasis on description of the study area, sampling design, a...
