Abstract:
This study aimed at uncovering the alternative sources of finance for practiced MSEs
Operators in Sebeta town. The goal of the research is to provide the country’s policy
makers, program administrators and developments practitioners with information to
make sound policy and program decisions about financial sources and the reduction of
financial barriers.
The research process comprised of three distinct phases, such as 149 sample
respondents MSEs owners/ operator, 4 experts financial institutions, such as 2 CBE, 2
MFI ( OCSSCO) and 2 experts of MSEs Development Agency, in total 6 experts and 149
MSEs owner/ operators in the total 155 sample respondents were used for analysis.
Open-and- close- ended questionnaires and interviews also used as methodological tools
or as instruments. Simple statistical techniques such as descriptive statistics and
explanatory, including tables were used in analyzing and summarizing. Finally based on
the major findings, conclusion and recommendations were also forwarded.
The major findings the research revealed that the main sources of finance at start –up
and post up for MSEs operators /owners were the equity section of the owners’ /
operators (own funds).It is also indicated that barriers to accessing finance are largely
due to lack of collateral, poor credit record, inadequate business skills and lack of
entrepreneurship concept during starting-up, and lack of adequate working and
investment capital during post-up stage of MSEs operators. The study also found that on
the issue of what role the financial institutions should play in reducing barriers to
finance, findings from the research suggested that more risk-taking by financiers,
relaxing rigid credit assessment criteria.
