Effects of Demonitizetion Instrumentson the Performance of Micro, Small and Medium Scale Enterprises in Ethiopia: The Case of Arada Subcity in Addis Ababa
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Date
2022-06
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Addis Ababa University
Abstract
People are busy and talking about Demonetization and its effects on the profitability of MSMEs since there is a limitation on cash based economy which is replaced with a new advanced technology and then the study was intended to investigate the effects of demonetization instruments on performance of micro, small, and medium scale enterprises in Addis Ababa Arada sub-city. The study examines the recent trends of the effects of currency demonetization on the profitability of MSMEs. Taking a descriptive and explanatory research design, the study accomplishes the objectives by focusing on the owners of the MSMEs. The target population comprised of 619 MSMEs sectors which are legally registered in Arada sub-city. Stratified sampling method was used to calculate a sample size of 186 respondents because, it allows evaluating data from different subgroups or strata to obtain sample representing entire population and administered questionnaire. The descriptive data wereanalysed using frequency table and percentage, while linear regression analysis was used to test the relationship between the independent and the dependent variables or formulated hypothesis using SPSS V.26. From the findings, the study concluded that, POS, ATM, Internet Banking, Mobile Banking, and Tele birr has a positive effect and significantly influence the performance (profit) of MSMEs. Based on the findings, some recommendations among others made are; policy makers should strengthen the government policies and regulatory framework to create conducive climate during the process of demonetization. Creating awareness concerning the currency demonetization and encouraging and increasing usage of demonetization instruments, then the simple way that the society is going to the digitalization or cash less economy were created. Keywords; Demonetization, MSMEs, Mobile banking, Internet banking, Tele birr, POS, Performance of MSMEs