Effect of Microfinance Institutions on Economic Empowerment of Women in Garissa Sub-County, Kenya

Abstract

Economic empowerment of women has in the recent years become popular as a strategy to minimize poverty and vulnerability and maximize women's opportunities to participate in economic development. Through MFIs, women can easily access affordable financial services. This study evaluated the effect of Microfinance institutions on economic empowerment of women in Garissa Sub-County. Specifically, the study sought to establish; the of Human capital, Social-capital. Physical capital and financial capital funded by Microfinance Institutions on Economic Empowerment of women. Analytical research design was used in the study. The estimated target population was 2,233 female members and 5 staff of Micro Finance Institutions in Garissa Sub-County. A Sample size of 115 respondents was selected by stratified random sampling technique. Semi-structured questionnaires were used in the collection of primary data through various interviews schedules. Data collected was coded, edited and analyzed using SPSS. Both descriptive and inferential statistics were conducted. Specifically, adjusted R ANOVA and correlation coefficients were generated. Data was presented using tables. The study established that 71.5% of variation in economic empowerment of women was explained by the independent variable (human capital role, financial capital role, social capital role and physical capital role). Financial capital influenced economic empowerment of women to the greatest extent explaining 54.0% of variation in economic empowerment of women. This was followed by social capital at 51.9%, then human capital and physical capital each at 38.6%. The study concluded that human capital, financial capital, social capital and physical capital role affected the economic empowerment of women in Garissa Sub-County. The study therefore recommends that the Government should support MFIS in provision of human capital role in terms of training and skills development and enable them get more women. The Government should also supplement MFIs in provision of services such as credit facilities for example by channeling more women funds through MFIs to reach more women. Additionally, government should encourage social networks and mentors to augment MFIs efforts in promoting social capital role and finally the study recommends promotion of physical capital such as machinery to the women by both the Government and MFIs. The findings of this will be used by stakeholders in the Micro-finance sector including policy makers, financiers such as donors as well as regulatory bodies. The study will also be useful to scholars and will contribute to the vast body of knowledge of the role of micro finance institutions on empowering women.