Date of Conferral

2021

Degree

Ph.D.

School

Management

Advisor

Howard B. Schechter

Abstract

Microfinance was intended to help smallholder farmers (SHFs), but the results have been disastrous for some individuals who have been unable to repay loans, often displacing them from their land. A lack of understanding of the lived experiences of borrowers complicates a full analysis of microfinance as a tool for poverty alleviation. The purpose of this qualitative descriptive phenomenological study was to explore the lived experiences of SHF borrowers in Akaki District, Ethiopia, related to microfinance loan repayment decisions. Habermas's critical social theory, which divides the social world into lifeworld and system, was the conceptual framework for the study. The participants were 23 purposively selected SHFs who had borrowed and repaid between two and 20 loans from microfinance institutions (MFIs) in Akaki District, Ethiopia. Interview data from the participants were analyzed using open, axial, and selective coding and the modified Van Kaam method. The findings showed differences among the bottom of the pyramid (BOP) market and the effects of microfinance loans. These findings challenge previously drawn conclusions about the contributions of MFIs for poverty alleviation. Appreciating the differences among the BOP market, listening to borrowers, having appropriate loan terms and conditions, and providing follow-up and support to borrowers are vital for MFIs to positively contribute to poverty alleviation. The study findings may further stakeholders’ understanding of the gaps in current practices and allow them to craft more meaningful microfinance policies that would achieve the intended result of alleviating poverty.

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