|Title||Successes in Expanding Microfinance Opportunities in Rural Ethiopia – Where There is Little Entrepreneurship?|
|Content Language||English (en)|
|Date Of Publication||2007|
|Description||Expanding micro-enterprise services like microfinance is currently receiving perhaps the highest attention ever as a key tool to achieving many development goals in poor countries. Indeed, prospects for a more inclusive financial services are expanding in poor countries like Ethiopia, with Government’s development strategies increasingly giving strong emphasis for sectors that support ‘self-employment’, thus further improving the enabling environment for financial intermediation.
Thus the microfinance service has been expanding over the last one decade or so in Amhara Region of Ethiopia, by organizations like the Amhara Credit & Saving Institution, not withstanding the fact that it still dominantly use a single methodology of Group Guarantee Lending Model (GGLM). Institutional efforts to ‘customize’ such models to the local socioeconomic situation where agriculture is the dominant activity are indeed paying – adjusting the size and functions of the group; integrating with and effective use of endogenous community knowledge for client screening and follow-up; and de-linking repayment schedule from the actual cash flow of the agricultural activity to which loan is taken; offering convenient saving mechanism to clients which provides ‘self-insurance’ and help smooth income flow from seasonal and risk-prone agricultural activities; etc.
Yet, enhancing the efficacy and impact of the services are becoming challenging task since such agricultural and related activities are little supported by new technology, BDS, marketing, good infrastructure, etc. Low BDS support accompanied by poor entrepreneurship culture, which, to an extent, has been aggravated by the generous relief and safety-net supply has been an impediment for micro-enterprise growth. Indeed, this also is a challenge for national development at large.|
|Number of Pages||15 pp.|