Determinants Influencing Access to Finance For Small and Medium Enterprises in Addis Ababa
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Date
2024-06-03
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A.A.U
Abstract
Most economies rely on Small and Medium-Sized Enterprises (SMEs) for their operations.
Despite the fact that SMEs are vital to a nation's financial prosperity, one of the largest barriers
to their growth and daily operations is still finding funding. Investigating factors influencing
SMEs' access to financing in three sub-cities—Yeka, Nifas Silk, and Kolfe Keraniyo—of Addis
Ababa was the aim of this study. The study included both descriptive and explanatory research
designs.Simple correlation and regression analysis, ANOVA, and descriptive statistics like
frequency, percentage, tables, and graphs were used to analyze the research. The findings
indicate that, on average, 55.5% of the selected SMEs wanted financing but were unable to
obtain it, whereas just 15.1% of the studied enterprises had access to financing and 29.3% of
them asked for loans but were only granted a portion of them. Furthermore, the data indicates
that the bulk of financing (47.6%) is utilized to support personal savings. In the Addis Ababa sub
city, the size of the company, the need for collateral, awareness, and the cost of borrowing all
have a statistically significant impact on SMEs' access to financing (yeka, Nifas silk, and kolfe
keraniyo).