The Effect Of Micro Finance Institution Accessibility On The Growth Of Micro And Small Enterprise: The Case Of Ambo Town West Shoazone, Oromia, Ethiopia

Abstract

The research was conducted to examine the effect of Micro Finance Institution Accessibility on the growth of Micro and Small Enterprise at Ambo town. The study used mixed (descriptive and explanatory research design). The population were all 866 registered SMEs in the Ambo town. The sample frame was drawn from the Ambo town Micro and Small Enterprise. In this study, stratified sampling was utilized. A sample size of 100 SMEs in the Ambo town were used in the study and was obtained using the Yamane formula. Primary data was collected from MSEs owners and employees using questionnaire and analyzed by using descriptive and inferential statistics. Person’s correlation Statistical tool and multiple regressions shows the effect of the selected variables namely financial services, training services and advisory service on the Growth of Micro and Small Enterprises. The results reveal that financial services and advisory services are positively and significantly affecting the growth of MSEs in the study area. The values generated in the Pearson correlation for Financial Service (r= .635, P<0.01) are significantly and positively correlated with Growth of Micro and Small enterprise in this work study. The regression result of Financial Service i.e. (Beta=.416) with (Sig. = .000) makes the higher contribution to Growth of Micro and Small Enterprise. This implies the presence of higher relationship between Financial Service and Growth of Micro and Small Enterprise is statistically significant. Training service has Pearson correlation coefficient (r=.512, P<0.01) are significantly and negative correlated with Growth of Micro and Small enterprise. The regression result which shows that training Service i.e. (Beta=-.011) with (Sig. = .896) makes the moderate contribution to Growth of Micro and Small Enterprise. This implies the presence of moderate relationship between training Service and Growth of Micro and Small Enterprise is statistically negatively significant. Advisory service has Pearson correlation coefficient (r=.596, P<0.01) are significantly and positive correlated with Growth of Micro and Small enterprise. The regression result which shows that Advisory Service i.e. (Beta=.308) with (Sig. =.000) makes the high level contribution to explaining the dependent variable Growth of Micro and Small Enterprise. This implies the presence of high relationship between Advisory Service and Growth of Micro and Small Enterprise is statistically significant