THE ROLE OF ACCESS TO CREDIT AND ITS EFFECTIVENESS IN REDUCING UNEMPLOYMENT THE CASE OF SELECTED MICRO AND SMALL SCALE BUSINESS ENTERPRISE IN MESKAN DISTRICT, GURAGE ZONE

Abstract

This research aims to the role of access to credit and its effectiveness in Reducing Unemployment in Gurage Zone: the case of Mesekan District selected MSE᾿s. For the sake of achieving the objectives of this study, questionnaires were analyzed using statistical analysis such as descriptive and inferential analyses. Mean and Standard deviation explained the descriptive statistics while Pearson Product Moment Correlation Coefficient and Multiple Regressions applied. Information was gathered using a five point Likert scale questionnaire from a sample of 115 micro and small scale operators and through an interview conducted with 20 micro and small scale operators. The respondent operators were selected using stratified random sampling technique from each stratum; the sample has been selected through disproportional stratified sampling used. Besides, the interview questions were analyzed using descriptive narrations through concurrent triangulation strategy. The empirical study elicited eight major challenges which seem to affect the effectiveness of credit access of MSE's in the District which include: marketing, management, technological, finance, entrepreneurial, working premises, infrastructures factors and including bureaucratic bottlenecks system. The findings further indicated that among the independent variables Marketing, management, technological and financial factors were the major factors that significantly affected the effectiveness of credit access to reducing unemployment. Based on the findings it was recommended that government to establish well structured marketing sites by providing selling and display places in areas close to working area and Provision of training on quality improvement in order to improve the effectiveness of credit access. Provision of business development services such as training technical and managerial, advisory and counseling services are very crucial for effectiveness of credit access of MSE᾿s. micro finances institutions should improve access to finance through offering a better lending terms and conditions and also government supporting institutions work effectively and efficiently for the effectiveness of credit access