Abstract:
The purpose of the study was to assess on challenges of finance for micro and small enterprises in
case of jimma town. The study was used descriptive research design methods was used to conduct
the study. The study was targeted a sample of 378 from a target population of 7218 MSEs located in
jimma town. Proportional Stratified random sampling technique was used in selecting the
respondents for the study. Primary and secondary data was collected from the study respondents
through using self-administer questionnaires and published via unpublished document from jimma
MSEs Offices, journal, books and other respectively. With the quantitative data collected through
the questionnaire a descriptive statistical analysis method was used and analyzed descriptively and
presented through figures, tables, percentages, bar charts, pie charts and tabulation to show
differences in frequencies. Statistical Package for Social Sciences (SPSS) version was used to aid in
coding, entry and analysis of quantitative data obtained from the closed ended questions. The study
was revealed out the key source of finance for MSEs is personal saving followed by microfinance
institutions which are informal and semiformal source of finance respectively. It was also revealed
out the major challenges hindering micro and small enterprises from accessing credit facilities to
be stiff collateral requirement, interest rate, bureaucracy of of rules and regulation of credit policy
of financial institution.
