Accounting Practices of Small and Medium Sized Enterprises and its Effect on Access to Finance in Addis Ababa
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Date
2011-06
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A.A.U
Abstract
This study seeks to examine the accounting practice of small and medium sized enterprises and
Its effect on access to finance in Addis Ababa. identifies the sectors the key to unlocking the
economic potentials of the country. However, the sector is constrained by a number of factors
which include among others minimum or poor accounting practice and difficulty in accessing
credit. facilities. For the achievement of the objective of the study quantitative research approach
particularly survey design were used and the data obtained were analyzed using descriptive
statistics and ordinary least square regression.
The study revealed that the majority to the studied firm has no formal accounting practice. The
study also revealed that the major sources of finance available .for the establishment and
expansion of SMEs in Addis Ababa are personal saving, microfinance, money form Fiends or
relative, iqub and less From banks. The result of ordinary least square regression evidences that
variables such as capitol, manager education level and age of the .firms are the significant
determinants of firms' accounting practices whereas the problems significantly associated with
access to bank credits are the demand for collateral, accounting practice or formal accounting
information and age the farm
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Keywords
Its Effect, Medium Sized Enterprises