THE ROLE OF MICRO CREDIT UTILIZATION ON ECONOMIC EMPOWERMENT OF SELF-EMPLOYED WOMEN; THE CASE OF ADI HAKI SUB CITY OF MEKELLE CITY

Abstract

Microfinance empowers women by putting capital in their hands and allowing them to earn an independent income and contribute financially to their households and communities. Despite this micro credit utilization have major challenges and its role is questionable. Descriptive research design with mixed approaches was employed. The study used primary data collected through questionnaires distributed to self-employed women of Adi haki sub city. The descriptive analysis reveals that credit adequacy, interest rate, rigidity of repayment schedule and post credit service were important challenges of micro credit utilization by self-employed women. Also, the study find plays a greatest role in empowering self-employed women by increasing their income level, saving habit, right over assets and decision-making involvement. Therefore, this study recommends for enhancing micro credit utilization, micro finance institutions should introduce scalable loan products with progressive increases based on repayment history and business growth and should adopt flexible repayment plans aligned with cash flows borrowers as rigidity of repayment schedule is a major challenge of micro credit utilization by self-employed women. The study also recommends post credit service including skills training, market linkages, and financial literacy should be provided by micro finance institutions, other non-governmental organizations and the government bodies timely and properly.