The Impact of private Bank Financial Accessibility to Small and Medium Enterprise and their contributions on Economic growth of Ethiopia
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Date
2019-05
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Addis Ababa University
Abstract
The overall objective of the study is to evaluate the Impact of private Bank Financial Accessibility to Small and Medium Enterprise and their contributions on Economic growth of Ethiopia. The study was employed quantitative method After fulfilling all of explanatory variable time-series FGLS regression basic assumptions and conducting unit root test, regression analysis is conducted.
From Cross-sectional time-series FGLS regression result the Impact of private Bank Financial Accessibility to SMEs which is accounted for an average of 29% of GDP, and represented one tenth of bank loan assets, market capitalization of equity markets for SMEs is higher than 4.2% of GDP in constant manner. In this context, the MSMEs financing gap suggests the limitations of bank lending for MSMEs financing. Financial institution has shown an encouraging growth in its growth and outreach. Private Bank Financial Accessibility to Small and Medium Enterprise portrayed by indicator of Ratio expenditure which is Ratio of Cost of Energy Consumed to Total Industrial Cost by Major Industrial Group is 2.5% probability interval to be worth which is contributed to country economy by 1.21GDP. Similarly, the result on private Bank Financial Accessibility to Small and Medium Enterprise portrayed based on portfolio of Gross Value of Production: Ratio of Value Added to Gross Value of Production by Major Industrial Group likely hood ratios of worth by 2.2% which is contributed to 2.9% for country growth. Finally, portfolio of SMEs ROE which is the Ratio of Operating Surplus to Gross Value of Production by Major Industrial Group ratio of worthiness is 7.8% which is contributed to the country GDP by 3.18 %. Finally, it is concluding that impact of private bank towards financing SMEs in Ethiopia shows relatively in infant stage.
Description
The Research submitted for the partial fulfillment and Requirement of Masters of Business Administration
Keywords
Financial accessibility, Private bank, GDP