Context

This feasibility study is part of the joined collaboration between the CIDR and Buusaa Gonofaa MFI which aims at increasing the outreach of Buusaa Gonofaa into remote rural areas of the Oromiya Region, in Ethiopia.
Due to the limitations of the current methodology and organisation used by Buusaa Gonofaa in reaching the remote rural areas, a new participative microfinance scheme needs to be developed.

A first identification mission was conducted by the two organisations from February 14 to 18, 2005 in two different Zones of the Oromiya Region, namely Arsi and Bale in order to identify which Zone would have the potential to start such a new scheme. The three districts that have been pre-identified to be targeted by the study are Lemu Bilbilo (Arsi), Dodola and Adaba (Bale).

Contribution

The objective of the study is to confirm the feasibility of setting up a participative microfinance scheme in rural areas of Arsi and Bale Zones, to define its components and implementation aspects, and to map out the conditions of its social, technical and financial feasibility.

The document is particularly interesting by its anlysis of the socio-economic situation of the selected districts : main characteristics in terms of history, geography and demography ; possible structural constraints (literacy level, infrastructures, insecurity problems,...) upon the development of a participative microfinance scheme ; existing forms of social organisation ; identify and analyse the existing economic activities and their current sources of financing ; the existing endogenous and formal financial systems.

Executive summary

This feasibility study is organized as followed :

 Presentation of the objectives ;
 Methodology and implementation of the study ;
 Socio economic description of the three districts ;
Conclusion on the feasibility of a network of rural credit and savings facilities ;—Drawing up of a three year programme.