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Objectives: The main aim of this paper is to analyze the effect of microfinance institutions on women’s empowerment in Wolaita Zone, southern Ethiopia.
Theoretical frame work: The effect of microfinance institutions through women empowerment by measuring economically, socially, and psychological.
Methods: The data was collected from 399 household respondents, mostly women, about five branches or districts of microfinance institutions. Descriptive statistics and binary logistic regression were used to analyze women’s empowerment after participating in microfinance institutions.
Results and conclusion: The output of the study shows a significantly positive effect of microfinance institutions on the selected indicators such as income, saving, consumption, living standards, medical facilities, decision-making power, political activity, and reducing domestic violence, but not significantly on education or women’s free movement for women’s empowerment. In addition to using descriptive statistics, after joining microfinance institutions, income, saving, and consumption increased by more than 548% compared with before joining the institutions. The findings of this paper can assist policymakers, such as stockholders, non-governmental organizations, and governments, in linking development programs with women.
Implication of the research: In this paper the researcher suggested that the stockholders, donors and government should take action to solve women awareness, support their financial problems, and should design appropriate policy.
Originality/Value: Our work and methodology are novel in the study.
