| Abstract: | Micro and Small Enterprises are engines for both developing and developed countries according
to their SMEs definitions but many developing countries SMEs face major challenges in Africa
and also in Ethiopia, is formulating appropriate development strategies that will capture the
financial service requirement of Micro, Small and Medium Enterprises which will accounts 80%
of the business sector .Delivery of credit for Small and Micro Enterprises for developing
countries like Ethiopia is increasingly being viewed as a strategic means of assisting the working
poor society. Over ten years a considerable amount of multi and by lateral support has been
channeled in to micro finance in Ethiopia (Addis Ababa) with a varying degree of success.
Like all development intervention evaluation and impact assessment studies to ascertain
achievement and failures of this programs would help a lot for further programs design in
Ethiopia(Addis Ababa), the SMEs sub-sectors has tremendous growth in terms of income,
capital accumulation, employment opportunity, business diversifications, up grading capital
goods e.t.c. The Small and Micro Enterprises has there for attracted great attention of financial
services providers to extend a range of financial offer for this target groups. However, little isstill
know of contribution of Micro Finance Institutions for the development and performance of the
Small and Micro Enterprises.
The study sought to establish the influence of Micro Finance Institution on the development and
performance of Small and Micro Enterprises in Addis Ababa (Ethiopia). The study employed
both qualitative and quantitative data analytical methods, and a multiple regression was run to
estimate the effect of Financial Institutions on the development and performance of Small and
Micro Enterprises to source of credit and contributed to their development and performance in
terms of productivity, competitiveness, profitability, introducing new technology, up grading
capital goods, in increasing their market share and diversifying their business. It is recommended
that there is a need of institutionalized public-private partnership for crating conducive business
working environment for SMEs operations this will reduce on the numerous constraints
challenging Small and Micro Enterprises so as to make the national benefits from their overall
contribution to poverty reduction and creating employment opportunity. Thus the government
and MFIs should develop the quality and accessibility of the service of supporting institutions by
assigning employees that have accurate knowledge in the specific area to identify the SMEs gaps
and to provide continuous follow up of the development and performance of Small and Micro
Enterprises. |
