Factors affecting Households’ Inclusions to Financial Services in Ambo Town, West Shewa Zone, Ethiopia.

Abstract

The main objective of this paper is to examine factors affecting Households’ Inclusions to Financial Services in Ambo Town, West Shewa Zone, Ethiopia. In order to achieve the objective of the study the researcher employed descriptive and explanatory research design, primary and secondary sources of data, and multi-stage sampling techniques were applied in the study. As far as sampling techniques concerned, simple random sampling technique was employed to select individual respondents to avoid sampling bias. By employing logit model, the findings of this paper reveal that gender, education, age and income are the pertinent factors which affect the financial inclusion in the study area. The results show that, as the level of education increases, the individual is more likely to be financially included. The result of this finding was confirms that the determinants of HHs FI were different across individual characteristics. The result of Pseudo R2 shows that change on the dependent variable (FI) was explained by 55.45% by the independent variables employed in the study. Therefore, 44.55 % of the change in the dependent variable (FI) was explained by other factors that are not included in the model. However, lack of documentation, lack of trust, lack of provide servicing and lack of money are significant barriers to HHs financial inclusion in the study area of Ambo town. However, lack of documentation, lack of trust, lack of provide servicing and lack of money are significant barriers to financial inclusion. It was strongly recommend that policies that aim to foster financial inclusion should target the vulnerable (the poor, young, less educated, and women) population groups