Microfinance Service Utilization And Its Determinants Among Smallholder Farmers In Degahabour Woreda Somali Regional State

The government of Ethiopia has been working on eradicating poverty which is the enemy of therncountry. One of the dominant tools that help to reduce poverty at households’ level is provision ofrnmicrofinance services to the poor in a sustainable way. The objective of this study was therefore torninvestigate Microfinance service utilization and its determinants among smallholder farmers basedrnon data collected from 134 randomly selected respondents, in Degahabour Woreda SomalirnRegional State. The study used both primary and secondary data sources. Primary data wasrncollected through un-structured questionnaires, interview schedule and focus group discussion.rnSecondary data was collected from Degahabour microfinance institution and reviewing ofrnvarious documents. A descriptive statistics and econometric model (Binary logit model) werernused for the analysis of the data gathered. The result indicates that utilization of microfinancernservice is significantly influenced by factors such as gender of the household, distance of thernfarmers from the MF institution, saving habit and training. More over the study pointed out majorrnproblems confronting utilization of MF services such as in adequate amount of credit, low levelrnof awareness about the services, smallholder farmers’ mobility, and climate change, fear ofrninterest rate, risk fearing. Microfinance institution is advised to pay appropriate attention tornfactors that influence microfinance service utilization in order to improve the performance ofrnmicrofinance service provision and service utilization and develop gender sensitive strategies thatrnpromote the service provision among the male members of the community.rnKeywords: MF service utilization, Smallholder farmers, MF institution, Degahabour Woreda

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