Department of Economic
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ItemFactors Affecting Loan Repayment Performance of Smallholder Farmers: The Case of Microfinance Institutions in Toke Kutaye District, West Shoa Zone Oromia Region, Ethiopia( 2019-11-10)The main purpose of this study was to identify factors determining the loan repayment performance of smallholder farmers, and evaluate the loan related performance of the microfinance institutions operating in Toke Kutaye district. Primary data was collected using structured and semi-structured questionnaires from 122 randomly selected smallholder farmer clients. Secondary data was obtained from annual reports and financial statements issued by microfinance institutions. The results of descriptive analysis revealed a significant mean difference between the defaulter and non-defaulter households in terms of total annual farm income, expenses on social ceremonies, livestock units, and distance from credit source. Although the repayment status in the study area was insignificant, there was a variation among institutions where the numbers of non-defaulters decline from Oromia Credit and the Saving Share Company, Vision Fund Microfinance and Eshet Microfinance successively along with ratio statistics result. The logit model revealed that age, education level, tropical livestock unit, participation on off-farm activities, repayment period suitability and gender was found to be positively significant whereas expense on social ceremonies, family size and loan diversion were found to have a negative impact on loan repayment performance of smallholder farmers. Hence, consideration of these factors is vital to enabling effective measures with the aim of improving loan repayment performance and helps to direct microfinance institutions, non-governmental organizations and policy-makers on where and how to channel efforts to minimize loan defaults in the study area. Key words: Binary logit; Loan repayment; Microfinance institution; Smallholder farmers
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ItemFeminization of Multidimensional Urban Poverty in Sub-Saharan Africa: Evidence from Selected Countries( 2019-10-10)The main purpose of this study was to examine the feminization of poverty in urban areas of Sub-Saharan Africa (SSA). The paper used Alkire Foster‟s multidimensional poverty approach and compared the well-being of female-headed households with their male-headed counterparts from a multidimensional perspective. The study utilized data compiled from demographic and health surveys (DHS) of selected SSA countries, namely; Ethiopia, Malawi, Rwanda, and Tanzania, and the World Development Indicators database. It applied a multilevel fixed-effect logistic regression model to analyze the effect of household and country-level variables on the incidence of poverty in two different household structures separately. The study found that female-headed households were poorer than male-headed households. The study also found that access to finance, age of the household head, household size, and household head education level had statistically significant associations with the multidimensional urban poverty status. Moreover, expenditure on primary school and healthcare had a significant effect on the multidimensional well-being of the households. The effect of these variables was different for the two household structures. Therefore, anti-poverty policies and programs should be targeted in a way to mitigate differences in household characteristics in favor of female-headed households.
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ItemThe Determinants of Export in Ethiopia, an Auto Regressive Distributive Lag Bound Test Approach( 2019-10-10)This paper identifies some of the main determinants of export in Ethiopia for the period 1977-2016 G.C. Also the paper tries to include new variables such as the export diversification index and financial development as determinants that have not been previously considered. Moreover, the study used a bound test approach which has not been used in previous research in this area. To test empirically the relationship between export performance and its major selected determinants such as real gross domestic product, real effective exchange rates, financial development, export diversification index, terms of trade, total investment, trade openness, and major trade partner GDP per capita i.e. China. The bound testing approach of the co-integration and error correction model, within the Auto Regressive Distributive Lag Model framework, is developed. The estimated results show that all explanatory variables listed above significantly affect the export performance both in the short-run and long-run except for financial development and export diversification index. With the sign of coefficients, all determinates variable sign is consistent with economic theories. Finally, the finding indicates that policymakers should give emphasis on the determinants factor of export. Measures must also be taken to reduce the constraints deterring the performance of the export sector through diversifying and promoting exports by boosting domestic capital for exports, serving to transfer technology, developing new products for export, making access to new and large foreign markets easier, and improving technical and management skills and lowering barriers to the firm‟s entry and reducing international trade costs.