The Role of Microfinance Institution on Promoting Urban Self-Employment The Case of Addis Credit and Saving Institution Arada Branch

Abstract

Economic development of any country comes through different processes (stages).Thorough these process, it faces many difficulties .Even thorough developed countries face these problems, the economics development of developing countries faces more obstacles. Among them, the requirement of collateral by banks as guarantee for borrowing money makes the poor peoples unable to get loan. These hinder them from being an active participant in economic development. This problem is show on both in rural and urban area of nation. Beside this, industrial employment opportunities in this countries are very narrow because they mostly employ educate people. As a result these most urban dwellers that have no collateral and not get higher education are unable to make their own livelihood. On the other hand, lack of access to the formal financial institution hangs people’s economy. Theses all h reasons slow down the speed of economics development of country. The introduction of micro finance institution makes the loan service easier then the formal financial institution. Micro financial institution has a grate role in speed up the economic development of country. The objective of this study is to examine whether this micro finance institution are able to pave ways for promoting self-employment for urban dwellers or not. To meet these objective the research use both primary and secondary data.