Participation in microfinance contributes toward improving women's livelihood. This study attempts to investigate the factors affecting the participation decision of women in microfinance programs and its impact on their livelihood in the Guto Gida district using cross-sectional survey data gathered in 2019/20. The survey was conducted on 169 sample women-headed households. Descriptive statistics and econometric methods such as binary logit regression and propensity score matching were employed for the data analysis. The results of the binary logit regression revealed that participation in the program was significantly affected by age, size of family, livestock holding, cultivated land size, distance from microfinance center, initial wealth, and perception of risk. The results of the propensity score matching presented that the mean income and saving of participants was much higher than their counterparts on average by 5339.82 ETB and 404.38 ETB respectively. The findings suggest that participation was associated with a significantly higher income and savings. Microfinance institutions and other concerned bodies should give important attention to participation decisions based on enhancing income. The summary of this study by policymakers and plan designers could bring better improvement in the participation of programs.

Published: 2022-07-22