Abstract:
Micro and Small Scale Enterprises are major contributors to the gross domestic product
and employment in economies around the world; their financial needs are underserved,
which holds back their growth. The aim of this study will be examine factors that
influence access to finance in Micro and Small Scale enterprises in the case of
Gindeberat District, West Shoa Zone, Oromia Regional State, Ethiopia. In this study,
description and explanatory of the research design used, as well as mixed types research
approach and multistage sample method was employed. The researcher has used both
primary and secondary data sources. Concerning the number of 140 questionnaire
responses from members of the Micro and Small Scale Enterprise in the study area.
Instrument data collection semi-structure questionnaire, face-to-face interview
respondents, key informant interviews, and focus group discussions. The data has been
analyzed through, descriptive statistics, and inferential statistics such as linear regression
and correlation have been used to draw important information. Descriptive statistics
such as frequency, mean, standard deviation, percentage and also, inferential statistics
such as t-test and chi-square were used for analyzing the data. The finding of the problem
research indicated that micro and small-scale enterprises are access to finance in
providing fairness measure profitability for their members. Besides, managerial skill,
collateral, information, training, market problem, infrastructure, source initial capital,
business plan, land, credit, and perception of financial institutions by creditors and weak
linkage among and other enterprises are majority problems that influence access to
finance for micro and small scale enterprises. The multiple regression analysis showed
that the institutional factor was significant (at 5% level of significance). While socio financial and challenge-faced by factors were significant(at 1% level of significance)..
Recommended that government support, willingness of members to join members’
enterprises and dissatisfaction with members’ participation were taken as an opportunity
for those. In addition, formal and informal institutions together are more encouraged and
staff is given regular training on enterprise trends and innovations of the enterprise
establishments had been both highly recommended in Gindeberat district.
