The Role Of Micro Finance Institution Services On The Performane Of Micro And Small Enterprises In Burayu City, Ethiopia

Abstract

This thesis examines the role of micro finance institutions services on the performance of micro and small Enterprises (MSEs) in Ethiopia with specific to Buryu city. The study focuses on examining the contribution of micro finance institutions, assessing the accessibility and affordability of products and services and identify ways of addressing the problems in accessing loans. The basic aspire to undertake this research is to identify and examine microfinance services and products that contribute to the growth of Mses. The study uses survey research design to assess the role of MFIs on the growth of Micro and small enterprises in Burayu City. The survey includes 300 respondents out of total population of 3,000 using purposive and proportional sampling. The primary data were collected by distributing structured questionnaires for MFIs loan officials, Micro and Small enterprise owners and Micro and small enterprises managers and interviews Burayu city credit and saving institution officials. In this study descriptive and regression data analysis were used. The quantitative data analyzed by using Statistical Package for Social Scientists (SPSS). The findings of the research indicated that there is significant role by MFIs in the growth of micro and small enterprises. The services offered by microfinance institutions that leads to growth of MSEs in Burayu city includes Provision of Finance, Advisory Services, and provision of Training and among those provision finance has significant role in the growth of MSE’s situated in Burayu city. The researcher recommends there is a need for a collective efferent from the governing bodies of those MFIs and the MFIs i.e., which can be an initiative to empower micro and small entrepreneurs through formulating a favorable borrowing policy, provide training, advisory services, and provision of finance together with MFIs which will top-up the current efferent made by MFIs in the growth of MSEs and apparently in the reduction of unemployment in the city.