| Abstract: | This thesis attempted to evaluate the nature of access to credit for small and micro firms in terms
of The practice and issues they encounter using the case of Arada Sub City Addis Ababa,
Ethiopia. Data were gathered from sample respondents who worked for SMEs using
questionnaires and Interviews. Through the use of a mixed research approach and an
explanatory and descriptive Study design, 200 SMEs were selected by a random selection
technique. Data from both primary and secondary sources were gathered, and descriptive
analysis was used to examine the result. The thesis particularly assesses how these four
objectives—credit standards, credit accessibility, credit adequacy, and challenges for SMEs to
receive credit—have an impact on the subject at hand. The findings of the study indicate that
funds are available for SMEs; however they are insufficient for their operation. Despite the fact
that they can obtain financing from banks and MFIs, SMEs mostly rely on their own earnings
and savings as a source of capital. Lack of collateral, a lengthy loan application process, and
high interest rates have all been noted as significant obstacles to getting a loan from banks and
MFIs. These findings are expected to help both SMEs and financial resource providers come up
with appropriate methods to bridge the gap toward promoting economic and societal
advancement of SMEs. |
