Determinants of Growth of Employees’ Savings and Credit Associations in Ethiopia: The Case of Addis Ababa University, Ethio Telecom and Ethiopian Airlines Employees’ Savings and Credit Associations

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Addis Ababa University


Employees’ savings and credit associations (ESCAs) in Ethiopia have been investing over the years with the objective of maximizing their wealth. As is the case with all investments, wealth maximization is a key objective whenever ESCAs have chosen an investment avenue from a universe of possible investment vehicles. The failure to build enough ESCAs’ wealth, through accumulation of institutional capital, is attributable to weak financial stewardship, inappropriate capital structure and imprudent funds allocation strategy. This study assessed financial practice as a determinant of the growth of employees’ savings and credit association with a view of improving the situation for socio-economic development. This study used descriptive design and data was collected from the respondents and financial records of the three ESCAs using a questionnaire and document review tool, and analyzed using both descriptive and inferential statistics. The study findings indicated that growth of ESCAs depended on financial stewardship, capital structure and funds allocation strategy. The study recommends that ESCAs credit policies should be the one that would enhance the evaluation of loan applications; ESCAs should make loan provisions to promote safety of funds, and apply optimum financing mix in their capital structure



Employees, Credit ssociations, Savings