THE ROLE OF INFORMAL MICROFINANCE INSTITUTIONS IN THE ECONOMIC EMPOWERMENT OF WOMEN IN GAZO WOREDA NORTH WOLLO ZONE OF AMHARA REGINAL STATE, ETHIOPIA (CASE STUDY OF VILLAGE ECONOMIC AND SOCIAL ASSOCIATIONS)

Abstract

Women economic empowerment is a vital developmental tool in every economy especially in less developed countries, as it assists to enhance women's economic well-being. Empirical evidences showed that microfinance institutions were an effective tool in enhancing women economic empowerment, especially in developing countries. However, the requirement of collaterals, tiresome procedural formalities and difficult repayment periods were the major problems to access financial service from formal microfinance institutions in rural areas besides to decision making problems. So, Village Economic and Social Associations is an informal microfinance institution which established to solve these credit access problems of low income people in rural areas. This paper investigated the Role of Informal Microfinance Institutions in the Economic Empowerment of Women in Gazo Woreda Amhara Regional State, Ethiopia (case study of Village Economic & Social Associations. For the study Multi stage sampling technique was utilized while selecting representative sample women for individual survey. The individual survey data was collected from a total of 197 sample women (97 VESA participants and 100 none participants) with structural questionnaire method. The primary data also collected from two FGDs to triangulate individual with survey data. Then the collected data was analyzed by descriptive statistics. T-test and Chi-square tests also utilized to describe characteristics of VESA participants and non-participants. The study revealed that VESA participants more economically empowered than none VESA participants. So, Village economic and Social Associations had a significant role in empowering Women economically and as recommendation it should be scaled up to others.