Abstract:
- Small-scale enterprises have become an important
contributor to Ethiopia’s economy. The purpose of this paper
was to bring to light one of the major prerequisites, namely
access to finance aspects, of the small scale enterprises
which are foundation in accelerating economic growth. The
main objective of the paper is to identify the challenges that
small businesses in Wolaita soddo town face in accessing
finance from financial institution through identifying the
dominant means of financing small businesses and factors
influence the extent of accessing finance. This study would
have adopted descriptive statistics and econometric analysis.
The target population would have been drawn from all micro
and small enterprises in Wolaita Sodo town. The data for this
study would have been gathered through the use of primary
and secondary sources from 282 respondents. The study
would have used stratified random sampling technique to
select the sample. Both quantitative and qualitative data
analysis methods were adopted. Besides, descriptive
statistics, the linear regression model were used to determine
the covariates of the likelihood of having a loan from a formal
financial institution. From the study findings, it can infer that,
sources of initial capital influences accessibility to credit
facilities to a great extent followed by purchase of fixed assets
financed by and major obstacles of SMEs access to credit
facilities. This study recommends that the credit giving
institutions come up with programs of educating the MSEs on
how they can go about obtaining credit facilities
