Determinants of Financial Inclusiveness in the Growth of Small and Medium Enterprises: The Case of Jimma Town.

Abstract

The aim of this study is to examine the determinants of financial inclusiveness in the growth of small and medium Enterprises: to examine effect of financial, governmental, environmental, organizational and individual factor on growth of SMEs in Jimma town. In this study, mixed research approach was used. Multistage sampling was used to select proportional number of samples from the study area. Both primary and secondary source of data were used. To obtain the primary data, questionnaires were distributed for 340 small and medium enterprises owners and managers to access the growth status of their enterprises and also to examine factors affecting their growth. Secondary data were collected from books, journals, past research works, official documents and the internet. Descriptive and inferential statistics were employed with the help of Statistical Packages for Social Science (SPSS V 20). Pearson correlation analysis is also used to see the relationship that exists between the variables. The findings of the study show that there exists substantial strong relationship between independent and dependent variable. Moreover, all of the selected independent variables were significantly explaining the variations in the dependent variable at 5% level of significance. This study recommended that managers, directors, and all stakeholders should not only be concerned about internal structures and policies, but also must consider the external environment together to improve their growth. Finally this study has recommended that managers of those firms should have to pay more attention those which are solved with a minimum effort, and prioritized them in order of importance in order to tackle them sequentially, thereby improving their business operations.