Abstract:
The objective of the study was to identify the determinants of credit service utilization in the study area. In this
study multi-stage sampling techniques were used to select 5 kebeles out of 42 kebeles of the study area and 150
sample households were randomly selected, of which 82 were credit users and 68 of them were non-users.
Primary data were collected through structured interview schedule. Various documents were reviewed to collect
the secondary data. In the study Econometric model (binary logit model) was used to identify the determinants of
credit service utilization. A total of fifteen explanatory variables were included in the model. Out of these, seven
were found to be statistically significant and most of the coefficients of these variables exhibited the expected
signs with the hypothesis. These variables include total income, saving habit, collateral type, training and
technical advice, possession of fixed assets, risk fearing and lending procedure. Therefore, credit service
providers should give attention to factors that significantly influence credit service utilization in order to improve
the performance of microfinance service provision and credit service utilization
