2.6.3 Analytical Framework
There are various factors and constraints which may explain
why people are poor: inadequate amount and/ or quality of assets; constrained
opportunities for welfare generation from assets; and qualitative factors such
as vulnerability, powerlessness and social exclusion (Gulli and Berger 1999).
The main contribution of financial services savings, credit and insurance is to
address their financial constraints and to facilitate management of money
(ibid)
FIGURE 3: LINKING MICROFINANCE WITH POVERTY
REDUCTION
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MFI OUTREACH IMPACT DOMAINS POVERTY REDUCTION
? MFI
· Mission and objectives
· Methodology, terms and conditions ?
OUTREACH
· Scale
· Depth
· Breadth
· Geographical
· Quality
? IMPACT DOMAINS
· Income increases
· Protection against income shocks + reduced
vulnerabilities +diversified IGAs
· Health and nutrition improvement
· Children Education
· Empowerment and building social capital
? Poverty Reduction
Source: Adapted from Gulli and Berger (1999)
This analytical framework is build on the ground that if the
MFI mission and objectives are geared towards poverty reduction, then the
terms, conditions and methodology and product design have to be favorable for
the poor to access the microfinance products and services which will be
reflected in the outreach; how many poor people are reached (scale of
outreach), how poor are the clients (depth of outreach), in which economic
sectors are they engaged (breadth of outreach), where do they live
(geographical outreach) and the quality which is how the services fit the needs
of potential clients. Depending on whether the poor have been reached with
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microfinance, then impact may be expected in terms of (i)
income generation, (ii) asset building and reduced vulnerabilities defined as
increases in ownership of household's physical assets and reduced
vulnerabilities as the poor are encouraged to save and diversify their
livelihood activities, (iii) empowerment which means enabling the poor to have
greater control over the resources and their lives and taking part in family
and community decisions,(iv) building social capital implying reduced
isolation, opportunity to share information and building the bond that was not
previously there. (V) Good health in terms of improvement in nutrition and
afford medical care, and (VI) education of clients' children which is investing
in children's education as a result of new income from micro-enterprise. This
will in turn lead to poverty reduction on women and all family members.
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CHAPTER THREE: RESEARCH METHODOLOGY
3.1. RESEARCH METHODOLOGY
This research methodology was designed in a simple way and
conducted using a detailed questionnaire and structured interviewed to gather
and systematically track the client's responses on the impact of microfinance
towards their economic empowerment.
Research methodology can be described as a course of action
which describes the tools that are used when conducting a research study. This
chapter involves various methods, techniques and procedures of the data
collection, processing as well as data analysis that were used to collect,
analyze, and interpret data which gives an overview of how the entire study was
conducted to reach a final conclusion on how microfinance leads to women's
economic empowerment. I t also discusses the case study, the population, sample
size, and sampling the techniques used during research study such as,
documentations, questionnaires and interviews. The chapter cannot conclude
without taking about various procedures for data processing and analysis. These
procedures include percentages, editing, coding, and tabulation.
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