The Impact of Microfinance Services on the Growth of Small Business Enterprises in Jijiga and Degahbur Cities Administration
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Date
2019-02
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Addis Ababa University
Abstract
This study has investigated the relationship between the microfinance services and the growths of small
business enterprises as well as to analyze the microfinance services have significant ability and positive
impacts.This study adopted an explanatory method that aimed at finding the impact of MFIs services on
the growth of SBEs to identify the extent cause and effect relationship of variables. The study adopted
cross-sectional survey research was applied with total population of 9180 registered Jijiga and Degahbur
cities, simple random sampling was applied to select 154.Only 146 respondents were appropriately
completed questionnaire. This study used by both primary and secondary source of data with the research
approach of qualitative and quantitative approaches. The Adjusted R squared of the findings as shown
that with the value of0.52 an indication that there was variation of 52%explained the growth small
business enterprises due to changes in Collateral, Loan interest, Insurance services, Business Idea
Generating, Age Group, educational level, Saving service, Loan Term, Loan repayment, Loan Size,
Training program, Advisory services provided by MFIs at 95% confidence interval. R is the correlation
coefficient which shows the relationship between the study variables. From the findings shown in the
table below there was a strong positive relationship between the study variables as shown by 0.748.The
research concludes that After discussing with respondents about the involvement of microfinance to the
growth of small business enterprises in Jijiga andDegahbur and presenting the collected data in the form
of description, percentages, statistical tables and frequency distribution, discovered that the big number of
the respondents confirmed that microfinance institution services had impact on the growth of small
business enterprises.All variables confirmed MFIs services most important of the growth of small
business enterprises in Jijiga and Degahbur cities and the investigation shows that most SBEs confirmed
that microfinance services improved their growth of small business enterprise. SMFIs should note that
their services are improving the growth small business of most of the enterprise but put in place strategies
to market their service more aggressively. The researcher recommended Microfinance, particularly
Somali microfinance should be encouraged increasing their loans size and training to SBEs workers. This
can be achieved from side to side comforting the conditions of granting loan, flexible repayment period,
understandable term of agreement, reduction in the rate of interest and awareness through routine training
and programs and more supervision. Further future research is recommended by including more variables
other than those included this research like government policy and regulation, level of employment
accessibility and availability of infrastructures.
Description
This thesis research submitted to department of Accounting and Finance in partial fulfillment of the requirement for the award of a degree of Master of Science in Accounting and Finance, Addis Ababa University
Keywords
Growth, Microfinance, Small business enterprises