Outcomes of an Ethiopian Microfinance Program and Management Actions to Improve Services

Abstract

Abstract: Management decision making in MFIs is becoming increasingly tied to collecting information about social performance. This paper examines the impact of participation in an Ethiopian microfinance program on indicators of socioeco-nomic status including wealth, income, and home or land ownership. A survey assessing these outcomes was conducted in May 2003 in two predominantly rural sites in Southern Ethiopia and included 819 households. The article discusses management decisions made as the result of survey findings about socioeconomic status and food security to increase retention rates and to facilitate client savings. Additionally, the management was prompted to increase the number of female clients and raise the proportion of female loan officers. This paper illustrates how data from routine monitoring and evaluation can be linked to MFI management decision making, which ultimately results in providing better microfinance services. Microfinance programs focus on expanding local economicactivities and improving the standard of living of theirclients by providing financial services needed to establish small businesses. Microfinance can be defined as “the provision of banking services such as savings, credit and money transfer to poorer