Assessment of the Effects of Microfinance on the Socio-Economic Status of Women: Case Study of Wodanga Location, Sabatia Constituency, Vihiga County, Kenya

Abstract

In African, and Kenya in particular, microfinance institutions and projects have been on the rise. Micro credits have been seen as a means to reach out to the underprivileged people, especially women folks, as a way of meeting the Sustainable Development Goals (SDGs) which is a successor of the Millennium Development Goals (MDGs) as a strategy of lessening poverty. This study assessed the influence of microfinance on the social economic status of women folks. Its objectives were to assess the effects of access to microfinance credit on socioeconomic status of women, to examine the effect of microfinance saving product on socioeconomic status of women, to determine the extent to which microfinance services influence on financial literacy of women, and to evaluate the effects of payment service provisions by microfinance on socioeconomic conditions of women. The study targeted women in Wodanga location who were beneficiaries of microfinance services. Random sampling technique was used to select a sample size of 93 respondents. The questionnaire and key informant interviews were used in data collection, which was analyzed using the Statistical Package for Social Sciences version 23. From the findings, microfinance credit had impacted the socio-economic status of women in Wodanga location, where 80.6% (75) of the respondents stated that it had improved the socio economic position of women through improved access to savings, reduced the need to borrow money from informal sources at high interest rates, earned income to women, increased economic opportunities and improve the living standards of women. The study concluded that micro finance played an important role in the socio-economic improvement of the female in a society. This is so since access and use of micro finance facilities had given them the chance to get access to funds to start small enterprises, enlarge the current and as a consequence increase their earnings. The study recommends that microfinance institutions should provide financial literacy platforms to women so that they can reduce their chances of defaulting on loans and hence increase their access to microfinance services.