Microfinance and Women Economic Empowerment Nexus: Eastern Zone, Tigrai Region, Ethiopia

Ethiopia is one of the largest populated countries in Africa and the mainstay of Ethiopian economy depends on poorly performing agricultural sector. This is due to drought, civil war, land degradation, limited use of modern input, low level of investment, and low level of financial services to the rural households. The countries women constitutes half of the overall population and they are still suffered to economic poverty, social discrimination, and cultural subjugations in gaining productive resources and decision-making power. The incidence and severity of poverty level in Tigray is about 32.6 % (2010/11). Since, there is large number of women headed households who are living under absolute poverty in the region due to the long year civil war and limited number of studies undertaken on women economic empowerment, this study examined the microfinance and women economic empowerment nexus in this region. The study employed 270 households with equal share of these households were microfinance participant and the non-participant households. The total sampled respondents, 100 percent, of the sample were allocated to three rural areas of Eastern zone. Three woredas from the zone, known for their high use of credit, was selected purposefully and sample households were selected from the frame list of the participant and non-participant. Since the women economic empowerment level determined by different demographic and socioeconomic factors, this paper attempts binary logit model analysis to explore the possible effects of microfinance on the women economic empowerment. The result shows that the women economic empowerment level is considerably influenced by age of the household, family size, being microfinance participant, home ownership, land holding, livestock holding, education level, being household head, cash saving, household income level and availability of loan from other sources. Apart from the other economic empowerment variables, a variables like family size, being participant of microfinance, being a head of a household and livestock holding shows significant positive impact on the economic empowerment level. Finally, it is recommended that the economic empowerment could improve by concentrating on the positive factors, which affects the rural women and consequently women will be economically self-reliant and through be poverty levels will be reduced.