IMPACT OF SELF HELP GROUPS IN

REDUCTION OF URBAN WOMEN POVERTY IN

HAWASSA, SNNPR
M.A THESIS

By: FASIL SHIBRU GEBREHIWOT

Advisor: Dr. R. DAYANANDAN (Ph.D.)
Co-Advisor: HABTAMU GETNET (MA)

DEPARTMENT OF COOPERATIVES
COLLEGE OF BUSINESS AND ECONOMICS
HAWASSA UNIVERSITY
June, 2013
 Background of the study
• Ethiopia suffers from poverty, GDP per capita is one of the lowest in the world, and
the economy faces a number of serious structural problems. (African Economic
Outlook, 2012).

• The proportion of poor people (poverty headcount index) in Ethiopia is estimated to

be 29.6 percent in 2010/11 (CSA, 2012).

• According to key findings of the urban employment unemployment survey by the

Central Statistical Authority of EFDRE 2012, the employment ratio of urban
population was 51.5 percent.

• In SNNPR the unemployed population in urban areas of the region was with an
unemployment rate of 12.4 percent. The differentials of unemployment rates by sex
show that the female unemployment rate 17.5 percent is more than double as
compared to male 8.0 percent (CSA, 2012).
 Background of the study
• The question is how can urban poor women be released from the yokes of poverty? Free
handouts from NGOs and government agencies have made poor people develop a dependency
attitude and have robbed them of their confidence in their own ability to tackle problems.

• The urban poor women have potential in them. The Self Help Group (SHG) approach seeks to
bring out this potential and mainstream them with the rest of the community. Once they start
discovering their potential and self-worth, there is no stopping them from development
(Kindernothilfe, 2008).

• The basic idea of working with women SHGs is to train and organize women into groups of
10-20, to start a saving and credit scheme with capital coming from their own savings
accumulated for a certain length of time, without much finance or materials coming from
outside.

• In this context it is essential to assess the impact of SHG in reducing poverty among urban
women.
 Statement of the Problem
• Poverty is for many categories of the poor not simply an economic
phenomenon; it is also a social, cultural and psychological phenomenon.
Poverty reduction can be seen not only as increasing the income and assets of
households or individuals, but also as enabling or empowering individuals to
get themselves out of poverty.

• Poverty is most critical problem in the economic and social life of women in
Ethiopia.

• Although there are attempts both by the government and by non-government

actors to address women’s issues in general, and gender inequalities in
particular, the problem remains serious.

• Hence, it is essential to search for new ways to ensure that poor women benefit
from economic empowerment.
 Statement of the Problem
• In general, the government can directly help those in need. However,
another method in helping women to fight poverty is through SHGs. SHGs
tries to fight poverty and bring opportunities to the poor women in many
countries.
• SHGs are small informal associations created for the purpose of enabling
members to reap economic benefit out of mutual help, solidarity and joint
responsibility.
• In the coming years and decades, urban poverty will become a major
challenge for policy makers in Hawassa city. As the urban population of the
city is growing, so is urban poverty.
• According to Hawassa City Administration Department of Women,
Children and Youth Affairs, there is a need to have in depth study on the
impact of SHG on urban women in poverty reduction due to dearth of
studies.
• Therefore, this research attempts to explore the impact of SHGs on urban
women in poverty reduction in Hawassa city.
 Objectives of the Study
General Objective
The general objective of this study is to assess the impact that the involvement in SHGs has

brought to the urban poor women in poverty reduction in three selected sub cities of Hawassa

City.

Specific Objectives
 To find out the impact of participation in Self Help Groups to overcome women poverty in the study

area.

 To assess the increase of awareness due to SHG participation.

 To identify the factors determining the participation of women in SHG.

 To study the factors determining the success of SHG.

 To assess the changes takes place among women in access of resources and influence in decision

making due to the membership in SHGs.

 Significance of the study
• The valuable information generated through this study on poverty reduction among

urban poor women that may assist policy makers to understand the unique features

of urban poor women and help in designing appropriate policy for the interventions.

• The findings of this study also believe to be useful to SHG’s and stakeholders who

involve in SHG development to make informed decisions.

• The report will also serve as a reference document for researchers to embark on

studies of the same or related kind in other regions of the country.

 Scope and limitation of the study
• The area considered for this study was restricted to Hawassa city

only. Due to financial and time constraints, all SHGs organized in

SNNPR and other regions were not covered.

• However, out of 136 SHGs in eight sub cities, the study covered 106

SHGs in three sub cities of Hawassa city.

• In order to assess impact SHGs which are performed after the date

of establishment for three years or more was selected.

 METHODOLOGY
Description of the Study Area
• Hawassa is found in the Southern Nations, Nationalities and People's Regional State
(SNNPR) of Ethiopia.
• Hawassa city administration urban area is divided into 8 sub cities namely Addis ketema,
Hayek dar, Mehal Ketema, Bahil Adarash, Misrak, Menahariya, Tabor and Tulaa Town
(Kebele 01).
• SHGs in Hawassa are organized and supported by governmental and non-governmental
organizations.
• According to the data collected by the Hawassa City Administration Department of Women,
Children and Youth Affairs there are 136 Women Self Help Groups with a total number of
2,308 members in 8 sub cities.
• All SHGs in selected three sub cities were organized by Integrated Urban Development
Department of the Ethiopian Kale Hiwot Church (IUDD-EKHC) and Bright Image for
Generation (BIGA).
 METHODOLOGY (Cont.)

Sampling and Sample Size

Multistage sampling procedure has been adopted to select the sample sub cities, SHGs
and the members.

• Among the 8 Sub cities 3 sub cities (Mehal Ketema, Adiss Ketema and Hayikedar)
were selected purposefully due to the high concentration of SHGs compared to
other sub cities.

• Since, the study has been related to assessing the impact of SHGs in urban women
poverty reduction, the SHGs which were established more than 3 years were
considered for the sample selection.

• Thus, there were 86 SHGs functioning more than three years in selected sub cities.
From this, 30 percent (26) SHGs were selected by using proportional random
sampling techniques from each sub cities.
 METHODOLOGY (Cont.)

Sampling and Sample Size (cont.)

• The sample members of the selected SHGs were selected by using the following formula.

𝑍 2 𝑥 𝑃 𝑥(1−𝑃)
• SS =
𝐶2

• Z= Z-value (2.576 for 99% confidence level)

• P= percentage picking a choice, expressed as decimal (0.5 used for sample size needed)

• C= confidence interval, expressed as decimal (e.g. 0.1=±10)

• Pop= Population

2.5762 𝑥 0.5 (1−0.5)

• SS =
0.12

• SS= 165.89

𝑆𝑆
• New SS = 𝑆𝑆−1
1+
𝑃𝑜𝑝

165.89
• New SS= 165.89 − 1
1+
441

• New Ss = 121
 METHODOLOGY (Cont.)

Sampling and Sample Size (cont.)

• Accordingly 121 members have been identified proportionate to the from sample
SHGs. In addition one focus group discussion (FGD) with 3 project facilitators and
3 community workers and key informants’ interview with 52 SHG coordinators was
also conducted.
Source and type of Data
• In order to assess the impact of SHGs in urban women poverty reduction
information related to demographic, economic, social, and political, access to
resources and involvement in skill development primary data was collected from
sample respondents.
Method of data collection
• Based on the variables identified in the study and to collect the data focus group
discussion and structured interview schedule for the sample respondents was
framed.
• Six enumerators were hired and trained for primary data collection and the
researcher was closely monitoring the data collection.
 METHODOLOGY (Cont.)
Method of data analysis
• The data collected from the field was processed and analyzed by using SPSS version 20
packages to address the objectives.
• To assess the increase of awareness due to SHG participation basic statistics such as averages
and percentage analysis were carried out to draw a meaningful interpretation of the results.
• In order to find out the impact of participation in SHG to overcome women's poverty in the
study area, paired T-test was applied in order to assess the socioeconomic status of sample
respondents before and after joining SHG.
• To identify the factors determining the participation of women in SHG average and
percentage analysis was carried out to draw a meaningful interpretation of the results.
• To analyze the reasons for joining the group by the member, all the possible reasons were
explored from the members of self-help groups. They were asked to rank the reasons in the
order of their importance. The ranks given by them were quantified using the Garrett Ranking
Technique (Garrett, 1969) .
• To assess the changes takes place among women through access to resources and influence in
decision making due to the membership in SHGs; Likert’s five scale measurement tools were
framed and percentage analysis was applied to assess changes due to membership in SHG.
• In order to determine the factors determining the success of SHG, factor analysis was carried
out.
 METHODOLOGY (Cont.)

Conceptual Frame Work

• A conceptual framework for the study was framed based on the ideas and

concepts gathered from review work of the existing literature of both that

will facilitate planning the study in a comprehensive manner.

• The purpose of this conceptual frame work was to provide explanation for

observed events and relationship, clarify as well as to show a bridge the

independent and dependent variables.

 Figure 2.1 Conceptual Frame on reduction of urban women poverty

Economic Aspect

 Access to Loan
 Employment
generation
 Increased Income
 Increase Saving
 Increase in Household
Expenditure
 Change in Meals per
day

Social Aspect
Skill Development
 Increase self-confidence
and Self Reliance  Access to education,
 Power over local polity training and seminars
and participation in  Improvement in the
socio-political decision- Reduction technical and
making managerial skills
 Access to basic services of Urban  Acquire IGA Skills
(health care, emergency  Ability to tackle
services, public transport, Women problems
school)
Poverty

Political
Access to resources
 Property rights to major
productive assets
 Information Resource
 Physical Resources (Land,  Protection from violence and
shelter , Market Place other crimes
 Infrastructure (piped  protection from
water, sanitation,
discrimination
drainage, electricity)

Source: Framed by the researcher

 RESULTS AND DISCUSSIONS
• Change in Knowledge and Awareness due to participation in
SHG
Knowledge Change
• The knowledge and awareness changes due to participation in various
trainings were analyzed and the results are presented hereunder.
Health and Sanitation Knowledge Change

• After involvement in SHG 89.3 percent of respondents confirm that their

knowledge increased regarding personal hygiene and more that 90 percent of
respondents stated that their knowledge has increased about environmental hygiene,
family planning and reproductive health and STD (Sexual transmitted disease).
More than 75 percent of respondents stated that awareness regarding prenatal care,
Sanitation and safe water, food and balanced diet has increased.
• Generally, it can be concluded that health and sanitation knowledge increase help
respondents choose healthier life styles and enable them to make better informed
choices among the health related options available for themselves and their families,
including those related to finding and managing medical care.
 RESULTS AND DISCUSSIONS(Cont.)
Awareness Change about SHG
• Unless the women have full knowledge about the objectives and functions
of SHGs, they may not show interest to participate.
• All respondents reported that their awareness regarding the objectives of SHG,

bylaws, rules and regulations of SHG as well as the importance of saving and loan

with SHG has increased after joining SHG.

• More than 90 percent of the respondents stated that awareness regarding business

plan, the importance of financial recording and income generating activities has

increased after joining SHG.

 RESULTS AND DISCUSSIONS(Cont.)
Social Awareness Change
• Social awareness is the active process of seeking out information
about what is happening in the communities around. A greater
awareness of social norms and problems leads to better
understanding and better solutions. Therefore in this research
respondents’ social awareness was assessed.
• More than 75 percent respondents reported that awareness on
group stability, social cohesiveness, child abuse and protection
has increased after joining SHG. 66.9 percent of the respondents
agreed that their awareness about the current political system.
• It is crucial to raise women's awareness about their contributions
to society and their political, economic and social rights since
they are to contribute to the rebuilding of their families,
communities and nations.
 RESULTS AND DISCUSSIONS(Cont.)
• Change in Decision making in the home
• After joining SHG, women’s participation in family decision making has
improved and shared decision making increased from 18.18 percent to
81.82 percent of the total respondents.
• Therefore it is believed that attending regular meeting in SHGs and
experience gained in group decision making process empowers women to
participate in decision making in the home.
Changes on Resource Utilization
• More than 90 percent of respondents disclose that family income, saving
capacity, borrowing capacity, food expenditure, meals per day, clothing
expenditure, expenditure for health care and medical treatment, expenditure on
children education and household furniture have increased.
• 66.12 percent of respondents confirm that work load have decreased due to
participation in SHG.
 RESULTS AND DISCUSSIONS(Cont.)
Impact of SHG in urban women poverty Reduction
• To find out the impact of participation in SHG to overcome women poverty in the

study area income change, change in saving habit and amount, access to loan,

housing condition, possession of household items, frequency of meals per day,

incidence of illness, access to medical facilities.

• Expenditure change in food, medical, house rent, piped water, electric power and

transportation was used as indicator to poverty reduction.

• Paired T-test was applied in order to understand the significant change of sample

respondents before and after joining SHG.

 RESULTS AND DISCUSSIONS(Cont.)
• Income Change
Table 4.8 Distributions of Respondents Income Change Before and After SHG

Before SHG After SHG

Monthly Sig. (2-
Number of Number of
Income in Birr t tailed)
respondents Mean respondents Mean
52
Less than 300 (42.98) --
47 18
300 - 600 (38.84) (14.88)
11 14.00
601 - 900 (13.22) (11.57)
06 49
440.17 1506.04 15.11 0.000*
901- 1500 (4.96) (40.50)
-- 18
1501 - 2000 (14.88)
14
--
2001 - 3000 (11.57)
08
--
3001 - 4500 (6.61)
Source: Primary Data
Note: Figures within the parenthesis show percentages.
Note: * shows the test of significance at 5 percent significant level.
 RESULTS AND DISCUSSIONS(Cont.)
• The result (Table 4.8) shows that 95.04 percent of the respondents had a
monthly income less than 900 Birr per month before they join SHG with an
average income 440.17 Birr.
• On the other hand, after women joining SHG, their monthly income
increased and 73.50 percent of the respondents have a net monthly income
greater than 900 Birr with an average monthly income of 1506.04 Birr per
month.
• The test of significance also confirmed the change is significant.
• Therefore, involvement in SHG does lead to an increase in income that
contributes to poverty reduction.
 RESULTS AND DISCUSSIONS(Cont.)
Change in Saving habit and amount
• Regular saving is a very important component in the SHG approach. It
helps the members stretch their ability and discover that they can do more
than they thought they could.
• The paired T-test result indicate that change in saving after joining SHG is
statistically significant.
• This indicates that individual members’ awareness regarding savings and
saving culture has improved significantly and overall performance of the
groups’ savings managed well in both in individual as well as group
savings.
• Regular savings and increase in income and household economic stability
may have a positive correlation.
• It is easier to save when income is increasing, in contrast to when it is
declining. This finding is in line with Bezabih (2007) and Getachew
(2012).
 RESULTS AND DISCUSSIONS(Cont.)
Change in access to loan
• It is difficult for the poor women to get loan from formal institutions due to
their poor economic levels to fulfill the requirements. Hence giving loan to
poor without collateral is one of the foundational principles of SHG for that
reason one of the most critical benefits of SHGs is to create easy access to
loan mostly for income generating activities.
• The study result depicted that out of 121 respondents 114(94.21%) women
took loan after they join SHG and 93.39 percent of the respondents took
loan from SHGs. Women completely quit taking loan from individual
money lenders after they join SHG.
• The Sig. (2-Tailed) value is 0.08 for loan from bank and 0.32 for loan from
NGO or micro finance institute which is greater than 0.05. Because of this,
we can conclude that there is no statistically significant difference between
loan from bank and loan from NGO or micro finance institute before and
after participation in SHG.
 RESULTS AND DISCUSSIONS(Cont.)
Housing condition and Household Item
• Housing is a major charge on income, a source of income
like flows of benefits or even cash income itself, and it
makes a big contribution to material living conditions.
• By the time the data was collected, tenancy status of the
respondents was 32.2 percent dwelled in their own house and
the remaining 67.8 percent dwelled in a rented house from
which 54.88 percent rented from private renters.
• The number of rooms that respondents resided was
significantly increased after their involvement in SHG. For
instance, 53.7 percent of respondents were dwelled in one
room house before they involve in SHG and after they involve
in SHG only 14 percent are reside in single-room houses.
 RESULTS AND DISCUSSIONS(Cont.)
Possession of Household Items
• The availability of durable consumer goods is another indicator of a household’s socioeconomic status and
the particular goods have specific benefits. For instance, a radio or a television can bring household
members information and new ideas; a refrigerator prolongs the wholesomeness of foods; and a means of
transport can increase access to many services that are beyond walking distance (Ethiopian Demographic
Health Survey -CSA, 2012).
 RESULTS AND DISCUSSIONS(Cont.)

• According to Ethiopia demographic health survey result (CSA, 2012) in

urban areas 42.1 percent own television and 90.91 percent of the

respondents own television.

• Similarly, regarding the possession of refrigerator the national data indicate

that in the urban areas of Ethiopia 14.3 percent own refrigerator and 24.79

percent of the respondents own refrigerator after they join SHG.

• The contribution of involvement in SHG in improving the possession of

household items is noticeable.

 RESULTS AND DISCUSSIONS(Cont.)
Change in frequency of meals per day
• Findings indicated that (table 4.13) 65.30 percent respondents can only
afford to eat only two times per day before joining SHG.
• After women join SHG, 52.10 percent afforded to eat three times per day
and the rest 47.9 percent more than three times.
• The paired T-test result indicates that the frequency of meals per day has
changed significantly; therefore, respondents’ meal per day after they join
SHG has significantly increased. These findings imply that respondents
change in frequency of meal per day is noticeable.
 RESULTS AND DISCUSSIONS(Cont.)
• Incidence of Illness
• Health problems were more common in urban areas. As health problem more
common that may relate to the standard of living and job performance (CSA, 2012).
therefore, incidence of illness was assessed in this research.
Graph 4.2 Incidence of Illness before and after SHG
90.00
80.17 78.51
80.00
70.00
60.00
Percentages

50.00
40.00

21.49

20.66
16.53

16.53
30.00

15.70
20.00
8.26

6.61

6.61
4.13

3.31
2.48

0.83

0.83
0.00
0.00
0.00

10.00

0.83

0.00
0.00

Diseases
Before in % After SHG in %

Source: Primary Data

 RESULTS AND DISCUSSIONS(Cont.)

• As shown the graph 4.2 the top 4 diseases that prevailed

among the respondents before they join SHG are Malaria,
Diarrhea, Intestinal Parasite and Typhoid.

• After women join SHG the top 3 prevalent diseases are

malaria, typhoid and typhus.

• It was observed that a slight decline in the malaria

prevalence after joining SHG, a significant decrease in
intestinal parasite, diarrhea, skin infection and dental decay.
 RESULTS AND DISCUSSIONS(Cont.)
Access to Medical Facilities
• From the graph 4.3, 79.34 percent got medical treatment from government medical centers,
34.71 percent from government hospital, 12.40 percent from private clinic and 33.06 percent
use traditional medicines before they join SHG.
• After they join in SHG they quit using traditional medicines and tending go to private clinics
that may be explained their paying capacity has increased and seeking better medical
treatment.
Graph 4.3 Respondents Access to Health Centers

100.00

100.00
120.00

87.60
79.34

100.00

70.25

66.94
65.29
62.81
61.98
Percentages

80.00

52.89

47.11
38.02

60.00

37.19
34.71

33.06
29.75
20.66

40.00

12.40
20.00

0.00
0.00
0.00
YES NO YES NO YES NO YES NO YES NO
Government Government Private Clinic Private Hospital Use traditional
medical Centers Hospital Medicine
Medical Facilities

Before SHG After SHG

Source: Primary Data

 RESULTS AND DISCUSSIONS(Cont.)
Change in Food Expenditure
• As shown in the table 4.14, the average spending per day for food per family before women
join SHG was 17.89 Birr and after the join SHG, it increased to 39.09 Birr per day per family.

• The test of significance indicated the change in food expenditure is significant.

Table 4.14 Respondents Expenditure for food per day before and after involvement
in SHG

95% Confidence
Std. Interval of the Sig. (2-
Description Mean Difference t df
Deviation tailed)

Lower Upper
Food Expense per day
per family Before 17.89 8.48
SHG
19.69 22.71 27.79 120 0.000*
Food Expense per day
39.09 8.29
per family After SHG
Source: Primary Data
Note: * shows the test of significance at 5 percent significant level.

Graph 4.4 Respondents Food expense per day per family

80 74
70
Number Respondents

60 55

50
40
40

30
20
20 15
9 7 8
10 3 5
0 1 2 2 0 0 1 0
0
10 Birr 20 Birr 30 Birr 35 Birr 40 Birr 45 Birr 50 Birr 55 Birr 60 Birr
Expense

Before SHG After SHG

Source: Primary Data

 RESULTS AND DISCUSSIONS(Cont.)
Medical Expenditure
• In this research respondent biannual medical expenditure was assessed that may give an
answer for their willingness and ability to pay for medical treatment in order to maintain their
health condition
• The table 4.15 results indicate that respondents’ biannual medical expenditure has increased
after joining SHG.
• Before women join SHG, 72.7 percent of the respondents’ medical expenditure was between
10 to 100 Birr and after they join SHG, 83.4 percent of the respondents’ medical expenditure
has become between 101 to 400 Birr.
 RESULTS AND DISCUSSIONS(Cont.)
• Expenditure for House Rent
• The amount of house rent denotes the quality house they reside.
• The average expenditure for house rent before women join SHG was 51.36 Birr per
month.
• After women join SHG their average expenditure for house rent has increased to
139.4 Birr per month.
• The change house rent expenditure is significant
Table 4.16 Respondents House Rent Expenditure before and after SHG

House Rent Before SHG After SHG

Sig. (2-
Per Month in t
Number of Number of tailed)
Birr
Respondents Mean Respondents Mean
58 33
Less than 100 (72.50) (41.25)
17 07
101 - 200 (21.25) (8.75)
03 20
201 - 300 (3.75) (25.00)
02 07
301 - 400 (2.50) (8.75) 7.42 0.00*
51.37 139.4
08
--
401 - 500 (10.00)
03
--
501 - 600 (3.75)
01
--
601 - 700 (2.25)
701 - 800 -- 01 (1.25)
Source: Primary Data
Note: Figures within parenthesis indicate percentages.
Note: * shows the test of significance at 5 percent significant level.
 RESULTS AND DISCUSSIONS(Cont.)
Expenditure for piped water
• The monthly expenditure for piped water before and after joining SHG is shown in
the table 4.17 which reveals 90.90 percent pay up to 20 Birr before SHG.
• After they join SHG, 88.4 percent of the respondents pay above 21 Birr.
• This shows that expenditure for piped water has increased and the respondents
could afford such expenses which is an indicator of positive impact.
Table 4.17 Expenditure for piped water before and after SHG
Monthly Expense Before Monthly Expense After
Per month Expenditure in SHG SHG
Birr Number of Number of
Percentage Percentage
respondents respondents
Less than 10 80 66.10 -- --
11 - 20 30 24.80 14 11.60
21- 30 09 7.40 23 19.00
31-40 02 1.70 38 31.40
41 – 50 -- -- 46 38.00
Total 121 100.0 121 100.00
Source: Primary Data
 RESULTS AND DISCUSSIONS(Cont.)
• Expenditure on Electric power
• The mean monthly expenditure for electric power before and after joining SHG is
shown in the table 4.18 which reveals average monthly expense before joining SHG
was 19.61 Birr and after joining SHG the mean monthly expense increased to 66.42
Birr.
• The test of significance indicated the change electric power expenditure is
statistically significant.
• It can be concluded that involvements in SHG considerably contribute to cover
monthly electric power expenditure.
Table 4.18 Respondents Electric power Expenditure before and after SHG
Before SHG After SHG
Sig.
Electric Power
Number of Number of t (2-
Expense in Birr Mean Mean
Respondents Respondents tailed)
99 92
Less than 100 (81.82) (76.03)
10
--
101 - 200 (8.26)
19.61 66.42 7.16 0.00*
05
--
201 - 400 (4.13)
01
--
401 - 601 (0.83)
99 108
Total (81.82) (89.25)
Source: Primary Data
Note: Figures within parenthesis indicate percentages.
Note: * shows the test of significance at 5 percent significant level.
 RESULTS AND DISCUSSIONS(Cont.)
• Expenditure on Transportation
• According to the results show in table 4.19 expenditure for transportation has
increased after women join SHG. 26.4 percent of the respondents cannot afford for
transportation before women join SHG.
• On the other hand after joining SHG all respondents can afford for transportation that
imply 83.50 percent pay for transportation above 31 Birr.

Table 4.19 Respondents Expenditure for transportation before and after SHG
Spending for transportation per Spending for transportation
Monthly Expense month before SHG per month after SHG
for transportation Number of Number of
Percentage Percentage
respondents respondents
Cannot afford 32 26.40 -- --
transportation
5 - 20 Birr 74 61.20 -- --
21 - 30 Birr 12 9.90 20 16.50
31 -40 Birr 01 0.80 23 19.00
41 - 50 Birr 02 1.70 29 24.00
Above 50 Birr -- -- 49 40.50
Total 121 100.00 121 100.00
Source: Primary Data
 RESULTS AND DISCUSSIONS(Cont.)
Impact of SHG in urban women poverty Reduction
• In order to arrive conclusion regarding the overall impact of SHG in the poverty reduction,
the national total poverty line used as key indicators.

• Hence, the 1995/96 national poverty line which was 1075 Birr taken as a benchmark to
examine the percentage of respondents below or above food poverty line before
involvement in SHG and the 2010/11 national poverty line which is 3781 Birr is taken as to
measure the percentage of respondents below or above the poverty line after joining SHG
(MoFED, 2012).

• As discussed in section 4.3.1, respondents’ annual income has improved after joining SHG.

• As show in the graph 4.5, 45.45 percent of the respondents were below the national poverty
line (1075 Birr) before joining SHG.

• After joining SHG 24.79 percent of the respondents are below the national poverty line.
 RESULTS AND DISCUSSIONS(Cont.)
• The results depicted that percentage of respondents below poverty line
decreased from 45.45 percent to 24.79 percent after involvement in SHG.
• This implies that involvement in SHG has positive impact in poverty
reduction.
• The major factors for respondents being under the national poverty line after
involvement in SHG are business failure and low income earnings from
income generating activities due to duplication of activities to the existing
competition in a limited market.
Graph 4.5 Respondents below and above the national poverty line before and after

SHG

80 75.21
70
Percentages

60 54.55
50 45.45
40
30 24.79
20
10
0
Below poverty Above poverty Below poverty Above poverty
line line line line
Before SHG After SHG

Source: Primary Data

 RESULTS AND DISCUSSIONS(Cont.)
Factors determining the participation of women in SHG
• Reasons for participating in SHG
• The top five reasons for participating in SHGs were mobilizing saving, access to loan,
promotion of income generating activities, family and personal asset possession and
low income before joining SHG.
 RESULTS AND DISCUSSIONS(Cont.)
Reasons for Joining SHG
• In order to analyze the reasons for joining Self Help Group, all respondents
were asked to rank the reasons in the order of their importance. The ranks
given by them were quantified using the Garrett Ranking Technique (Garrett,
1969). Table 4.23 Respondents Reasons for joining SHG

List of Reasons Total Mean

Score Score Rank
Mobilize saving 9630 79.59 III
Employment opportunity 9320 77.02 X
Regularity in attending meetings 9454 78.13 IX
Access to loan 9487 78.40 VII
Promotion of income generating activities 9461 78.19 VIII
Effective leadership 9522 78.69 VI
Involvement of NGOs 9761 80.67 II
Consumption-oriented credit 9486 78.40 VII
Family Head 9568 79.07 V
Family or personal asset position 9585 79.21 IV
To reduce old debts before joining the group 10051 83.07 I
Source: Primary Data

• The result indicates as shown in the table 4.23 the top five reasons for joining
SHG were to reduce old debt, involvement of NGO, mobilizing saving,
family or personal asset possession and family head in the order of
importance sequentially from highest to lowest.
 RESULTS AND DISCUSSIONS(Cont.)
• Factor Determining the Success of SHG
• In order to determine the factor determining the success of SHG factor
analysis was carried out.

• The "Component Matrix,” as shown in the table 4.24, gives the factor
loadings. This is the central output for factor analysis.

• The factor loadings, also called component loadings in Principal

Component Analysis (PCA), are the correlation coefficients between
the variables (rows) and factors (columns).

• Factor loadings are the basis for assigning a label to the different
factors. Loadings above ±0.50 are usually considered "high" and those
below ±0.40 are "low".
 RESULTS AND DISCUSSIONS(Cont.)
Table 4.24 Factors Determining the Success of SHG (Component Matrixa )

Component
List of Variables 1 2 3 4 5
Non-financial support from government -0.755 0.425
Managing conflict 0.648
Clear all its debts up to now 0.636 0.566 0.421
Team work 0.632 -0.426
Attitude towards self-employment 0.597 -0.430 0.449
Non-financial support from voluntary -0.571 0.559
individuals
Financial support from any NGO 0.556 0.501
Current capital 0.522 0.444
Non-financial support from any NGO -0.421
Other business services in the same area 0.741
Capital at the establishment -0.719 0.427
Non-financial support from other SHGs 0.693
Loan 0.603 0.608
Age 0.474 0.472
Saving culture of members -0.741
Regular meeting per month 0.565
Group decision making 0.455
Number of members of the SHG 0.757
Educational status 0.412
Extraction Method: Principal Component Analysis.
a. 5 components extracted.
Source: Primary Data
 RESULTS AND DISCUSSIONS(Cont.)
• For that reason non-financial support from government,
• Managing conflict,
• Clear all its debts up to now,
• Team work,
• Attitude towards self-employment,
• Non-financial support from voluntary individuals,
• Financial support from any NGO,
• Current capital,
• Non-financial support from any NGO have the highest factor
loading that contribute significantly for the success of SHG.
 RESULTS AND DISCUSSIONS(Cont.)
Table 4.25 Factors Determining the Success of SHG (Rotated Component Matrixa )

Component
List of Variables 1 2 3 4 5
Clear all its debts up to now 0.930
Loan 0.878
Current capital 0.631 0.439
Team work 0.618 0.510
Educational status -0.416
Attitude towards self-employment 0.777
Non-financial support from voluntary -0.706 0.531
individuals
Saving culture of members 0.650
Age -0.554 -0.439
Non-financial support from other SHGs 0.785
Other business services in the same area 0.756
Non-financial support from government -0.445 0.750
Managing conflict 0.447 -0.594
Capital at the establishment 0.723
Group decision making 0.690
Regular meeting per month 0.677
Number of members of the SHG 0.798
Financial support from any NGO 0.746
Non-financial support from any NGO -0.625
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Source: Primary Data
 RESULTS AND DISCUSSIONS(Cont.)
• Rotated component matrix as shown in the table 4.25 confirm the above facts in such
a way that

• Clear all its debts up to now,

• Loan,

• Current capital,

• Team work, and

• Educational status are that top five factors contributing to the success of SHG.

• Attitude towards self-employment,

• Non-financial support from voluntary individuals,

• Saving culture of members and

• Age are in the second group of factors contributing to the success of SHG.
 CONCLUSION AND RECOMMENDATIONS

CONCLUSION
• Sample women respondents of this study confirmed that their knowledge and

awareness has increased regarding SHG, personal and environmental hygiene has

also improved after they join SHGs.

• Also awareness regarding prenatal care, sanitation and safe water, importance of

child education, literacy, food and balanced diet, group stability and cohesiveness,

social cohesiveness, child abuse and protection has increased after joining SHG.

• Further they knew the importance of membership and saving culture.

 CONCLUSION AND RECOMMENDATIONS
• The study has demonstrated that involvement in SHG leads to improvement in the household
income that contributes a great deal to poverty reduction in urban poor women.

• Saving was unthinkable for most respondents before joining SHG; however, it was confirmed
that respondents saving has increased significantly after joining SHG.

• Access to loan from SHGs empowered and motivated women to work and contribute to the
family.

• The study confirmed that respondents’ housing condition has also improved in terms of the
number of rooms and the capacity of paying for rent after joining in SHG.

• In general, the capacity of paying for food, medical treatment, transportation, electric power
and piped water has significantly increased after joining SHG.

• Frequency of meal per day with each family has improved substantially.
 CONCLUSION AND RECOMMENDATIONS
• The factor analysis result shows that the variables that contribute to the
success of SHG are clear all its debts up to now, loan amount, current
capital, team work, and educational status that are top five factors
contributing to the success of SHG.
• The findings also confirmed that before women join SHG decisions were
dominated by male; however, after joining SHG women's participation in
family decision making has improved and shared decision making
increased considerably.
• Through SHG poverty is reduced considerably; therefore, women SHG
members are economically independent and their contribution to household
income was also increased.
 CONCLUSION AND RECOMMENDATIONS
RECOMMENDATIONS

• The study conclude that due to the participation in SHGs poverty has

reduced but it is not up to the extent to cover all aspects of poverty

reduction for this reason the following recommendations are forwarded

 Responsibilities of organizing SHG should not be vested with NGOs only.

Development Bank of Ethiopian, Microfinance Institutes and each sub

cities should work hand in hand by creating a link to one another to address

more women who are under poverty in Hawassa city live at the peripheries

of the city. .
 CONCLUSION AND RECOMMENDATIONS
 SHG organizing NGOs concentrate their activities in providing training in the
development of business plans and guidance about how best to avoid redundancy or
unnecessary duplication of projects and activities. This implies that there is a need
to impart better entrepreneurship skills and technical know-how to increase their
confidence about income generating activities with innovation and to improve their
social status. In order to do this an assessment should be made on training
effectiveness and impact of trainings that were delivered to SHG members and
there should be a need based training to address women problems.

 There are successful SHGs in Hawassa at the same time unsuccessful SHGs as

well. So that in-depth comparative analysis needs to be done in order to come up

with a new way of organizing and implementing SHGs as well as to understand the

challenges and constraints of SHGs.