Economics

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Browsing Economics by Author "Ababu, Tadesse"

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    The Role of Microfinancing Programmes and the Success of Small Businesses in Urban Ethiopia: A Case Study of Addis Ababa
    (A.A.U, 2001-01) Ababu, Tadesse; Ageba, Gebrehiwot (Dr)
    The study examined the role of micro financing programmers and the success of small businesses in urban Ethiopia considering the case of the POCSSBO micro financing programmers in Addis Ababa. The investigation is based on descriptive analysis and identification of the determinants of the probability of success in beneficiaries' businesses using the legit model. The data used for the study is primary and cross-sectional, collected with the help of structured questionnaire between March and April 2000, from a sample of 236 beneficiaries who benefited from POCSSBO micro financing scheme in Addis Ababa. The results indicate that the POCSSBO micro financing scheme contributed positively to employment creation and income generation which paves the way for the development of micro enterprises. Through the expansion of self employment opportunities to the beneficiaries of the programmers the credit scheme played a key role in raising the beneficiaries' income. The maximum likelihood estimation result of the legit model reveals the existence of some factors that significantly influence the probability of success in beneficiaries' businesses. The results indicate that the initial loan size, sufficiency of the loan for intended purposes, training given to borrowers before the loan, convenience of business area, business experience before the loan and high school level education of borrowers are important determinants of the probability of success in beneficiaries' businesses. Of these determinant factors of the probability of success in beneficiaries' businesses, sufficiency of the loan for intended purposes, training given to borrowers before the loan, convenience of business area, business experience before the loan and high school level education of borrowers are found to be enhancing factors of the probability of success in beneficiaries' businesses. On the contrary, the initial loan size is found to be inhibiting factor of the probability of success in beneficiaries' businesses. The project office should take into consideration these enhancing and inhibiting factors of the probability of success in beneficiaries' businesses in designing improved micro financing programmers in the future.