An Assessment of Financial Sources of Micro and Small Enterprises in North Shoa Zone Debre Berhan
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The purpose of this study to assess the source of finance, explore challenges and identify supports for Micro and Small Enterprises through their operation in Debre Birhan Town, 2016. A descriptive case study was employed to achieve the objectives of the study. In order to get relevant data from the target populations both quantitative and qualitative methods were employed. The findings of the study indicated that the main financial sources for start-up and expansion or working capital of MSEs relied on the informal sources especially from personal savings, relatives and friends. Owners find it very difficult to access credit from banks due to lack of collaterals and the loans provided by MFIs are small with high interest rates. So, the study suggests the need for the integration of the activities of the formal with that of the informal financial institutions to alleviate the problem of finance. The study also indicated that people starting MSEs are facing numerous difficulties both at start-up and while in due course of operation. Hence, pertinent bodies need to intervene in order to address these challenges and ensure sustainability of these businesses development. Finally, the study presented some possible recommendations so as to alleviate the problems.
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