The Role of Microfinance Institutions (MFIs) in the Growth of Micro and Small Size Businesses (MSEs) in East and West Gojjam Zones -Ethiopia

Ayenew Shibabaw

Abstract


Abstract

Micro and Small enterprises (MSEs) and MFIs are vital contributors to the overall performance of an economy. Although there have been studies on the role of MFIs in the Growth of MSEs in the other parts of the world and in Ethiopia, there is no research has been made so far and to the best of the researchers’ knowledge in East and West Gojjam Zones on this issue. Therefore, the aim of this study is to assess the role of MFIs in the Growth of MSEs in East and West Gojjam Zones. For the purpose of the study primary data is collected to achieve the objectives and tested the hypothesis using t-test statistical tools. The major findings of the study indicate that MFIs have contributions on Micro and Small enterprises growth (MFIs) and products and services, somewhat accessible for the MSEs. Most of the MSEs financing working capital as well as medium & long-term loan requirements by Borrowing from relatives, iqub, associations and Own saving /Retained earnings. Micro and Small enterprises were utilized their loans effectively. There is no significant difference between in the growth of MSEs with MFI services and MSEs without the service of MFI. Finally, the study suggested that the MFIs’ management has to work to contribute more in the growth of MSEs.

Key words: growth, contribution, accessible, utilization


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ISSN : 2251-1547