THE ROLE OF FINANCIAL INSTITUTION IN PROMOTIN PRIVATE INVESTMENT (IN CASE OF GUBRE TOWN

Abstract

This paper tries to examine the role of financial institutions in promoting private investment in Gubre town. Therefore this study was conducted to identify the role of financial sector in promoting private investment being operated in Gubre town. The researchers collected data from 15 respondents. Accordingly, the researchers have found that financial institution are the back bone for the growth of private investment, found that in Gubre town financial institution of commercial banks provide different kind of service for private investors. In addition, have also analyzed there are some problems faced by financial institutions and private investors. The study found financial institution bank make crucial role in giving deposit (saving) and loan service for investor by medium interest rate and it makes them to invest more, give service regarding with transfer of money from one place to another place, plays a crucial role by providing consultancy service for investors in which they direct the private investor into the best direction. The study recommended that financial institution pays medium interest rate for the deposit and loan of investors, increase interest rate of deposit and decrease interest rate of loan, it is better to increase private saving and loan for private investment, government can take corrective action to decrease inflation rate, like fiscal and monitory polic