Assessments on challenges of finance for micro and small enterprises in case of jimma town

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secondary data was collected from the study respondents through using self-administer questionnaires and published via unpublished document from jimma MSEs Offices, journal, books and other respectively.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.