Determinants of Financial Inclusion in Small and Medium Enterprises: Evidence from Ethiopia

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Goshu Dasalegn


The study examines the determinant factors that influence financial inclusion among small and medium enterprises in Ethiopia. The study uses explanatory research design and mixed research approach with both primary and secondary source of data utilized. More specifically, the study adopts a multiple linear regression model. The finding of the study reveals that; supply side factors demand side factors, market opportunity, and collateral requirements have a positive effect on the firm’s access to finance. On the other hand, institutional framework factors, and cost of borrowing has a negative effect on the firm’s access to finance. This study suggests that the rate of interest charged by financial institutions shall be considered for harmonization to make inclusiveness among small and medium enterprises access to finance. And financial institutions shall consider providing training for small and medium enterprises before issuing them credit access.

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