The effect of access to and utilization of microcredit on women economic empowerment : a case study of Katosbec SACCO in Kapchorwa District

Abstract

The main objective of microfinance was to provide an opportunity for the poor especially women to access finance and engage in income generating activities. This would in turn empower them and improve livelihoods of their households. The question on whether indeed microfinance/loans has empowered women or even reduced poverty has been debated by many scholars. Using a case of KATOSBEC SACCO in Kapchorwa District, the study examined the effect of access and utilization of microcredit on women economic empowerment. The study applied a mixed research method of both qualitative and quantitative study designs. Data was obtained through reviewing existing literature related to the topic, Focus Group Discussions (FGDs) with women who had accessed loans, Key Informant Interviews (KIIs) with key stakeholders such as Community Development Officers (CDOs), local leaders, bank managers and loans officers and through use of questionnaires for women borrowers. The study respondents were selected using simple random and purposive sampling techniques for survey respondents and KIIs respectively. Data obtained was analyzed using Statistical Package for Social Science, (SPSS) and presented inform of tables. This data was backed up with qualitative data obtained from FGDs and KIIs. The study revealed that access to microcredit alone is not enough to empower women unless it is utilized /invested in the right place. Access and utilization of these loans is reliant on several factors which include interest rates, financial literacy, lending conditions, nature of business and household relations especially relationship among spouses. Therefore, the study recommends that Micro Finance Institutions (MFIs) should support women in assessing their capacity to repay specific amounts of loans so that it does not become a burden. It is also important for MFIs and government to provide women with basic financial management skills to help them manage loans as well make informed financial decisions.