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;
• The relationship between empowerment, resources, agency and achievements.

It 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;
• The pros and cons of the group-lending methodology.

The report finds the following impediments to women accessing the program:

• Self-selection of group members that leads to the exclusion of the very poor;
• The following unfavourable factors:
  • Terms and conditions;
  • Loan size;
  • Low number of female loan officers;
  • Lack of business development services support;
  • Aversion to risk;
  • Shortage of time.

The paper states that microfinance helps alleviate poverty by:

• Enhancing human capital;
• Reducing vulnerability;
• Providing savings and insurance services and emergency loans.

It lists the following positive features of the self-help approach:

• Savings-based;
• Pride of ownership and autonomy;
• Integrated services of finance and business development;
• Economies of scale;
• 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.