ISSN NO: 0974-4274(PRINT), ISSN NO: 2582-1148(ONLINE)

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Title: Determinants of Small and Medium Scale Enterprise (SMEs) Access to Finance in Guji Zone

Year 2020
Volume/Issue/Review Month Volume - XIII Issue - I, Jan. - Jun. , 2020
Title Title: Determinants of Small and Medium Scale Enterprise (SMEs) Access to Finance in Guji Zone
Authors Tariku Gerito Denbelo
Broad area Tariku Gerito Denbelo
Abstract
 One problem that challenges SMEs is generating noble business idea but accessing the required finance to transform such ideas into practicality is another. Hence, this study examines empirically the factors which influence Access to finance for SMEs in Guji Zone selected Woredas, using firm-level data with the aim of identifying what determines internally access to finance of SMEs? And to understand which of the capital structure theories are appealing to them? To do this, the study identified seven firm specific variables from the literature to see their impact on the access of finance of the SMEs. A sample of 74SMEs were taken from the sample frame of 286 registered SMEs by using simple random sampling. The study used six years panel data. And the collected data were analyzed using multiple regressions (OLS) method. The regression result shows that, all the seven variables were statistically significant at 1% significant level. Out of the seven variables four variables such as; tangibility, age, growth and size are a positive relation with access to finance. On the other hand, the study found a negative relationship between the three variables i.e. Risk, location and profit ability with access to finance. Thus, to mitigate risk associated with providing credit to SMEs, this study suggest that, government intervention in the form of credit guarantee schemes may be an effective step towards addressing access to finance challenges facing SMEs. 
Description Tariku Gerito Denbelo
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