Investigation of Role of Micro Credit in Enhancing Income Diversification of Rural Households in Ethiopia: The Case of Eastern Zone of Tigray

This study aimed at investigating the role of microcredit, particularly DECSIs, in enhancing income diversification of rural households in Ethiopia in the case of Eastern zone of Tigray. We have used Tobit Model to estimate the role of microcredit as the dependent variable is censored between 0 and 1. The result confirms that age of the household is non-linearly related with income diversification index. The additional household labor, number of livestock and size of farm land does matter to diversify the household sources of income. However, educational status and marital condition of household head have no contribution for diversifying income sources. Micro credit services have a significant positive impact on the diversification of income