Factors Influencing Participation in Microfinance Programs: Evidences from Eritrea

This study aims to identify the factors influencing participation in microfinance programs. The starting point of the analysis considers the access of the poor and low-income people to formal credit markets. Using data of 400 respondents from the city of Asmara and its environs and binary logit model, the study examines key variables influencing participation in microfinance program, namely the saving and Microcredit Program (SMCP), a local Microfinance Program. The findings of this study reveal that address, age, gender, marital status, education, bank account, house ownership, land ownership and monthly income are found to be determinants in respondent's participation in SMCP.The findings of the study also suggest that improvements in lending schemes and loan products are required to better suit the diversified needs of urban population.