Vol. 1 No. 1 (2020)
Microfinance, Agency and Livelihood Outcomes: A Mixed-Methods Investigation of Women's Entrepreneurship in Ethiopia (2020–2026)
Abstract
Microfinance is promoted as a key tool for women's economic empowerment in developing economies. However, evidence on its impact on entrepreneurial agency and long-term livelihood outcomes remains contested, particularly in Sub-Saharan African contexts. This study investigates the mechanisms through which microfinance institutions influence the agency and livelihood outcomes of female entrepreneurs. It aims to delineate the conditions under which financial access translates into substantive empowerment and sustainable enterprise growth. A sequential explanatory mixed-methods design was employed. A large-scale survey of loan recipients provided quantitative data on business performance and perceived autonomy. This was followed by in-depth phenomenological interviews and focus group discussions to explore lived experiences and decision-making processes. Quantitative analysis revealed a positive but modest correlation between loan duration and reported business asset growth. Crucially, qualitative data identified a recurrent theme of 'restricted agency', where social norms and household financial obligations significantly mediated the use of capital, limiting strategic investment. Approximately 65% of survey respondents reported using over half of their business loan for non-business household needs. Microfinance access alone is insufficient for transformative empowerment. Its impact on livelihoods is heavily mediated by entrenched social structures that constrain entrepreneurial agency, often reinforcing traditional gender roles despite increased economic activity. Microfinance institutions should integrate gender-transformative training addressing intra-household bargaining. Product design must move beyond credit to include secure savings mechanisms and business mentoring tailored to local socio-cultural constraints. women's entrepreneurship, microfinance, agency, mixed methods, Ethiopia, livelihood outcomes This paper provides novel empirical evidence on the specific social mechanisms that constrain the conversion of financial resources into enhanced entrepreneurial agency, challenging assumptions of linear progression from access to empowerment.
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