Analysis of Effect of Microfinance on the Performance of MSEs in Amhara National Regional State, Ethiopia

Abstract

This article examines the effect of microcredit on the performance of the micro and small enterprises (MSEs) in Amhara National Regional State, Ethiopia. A total of 340 MSEs were randomly selected, and a survey method was used. Average Sales volume was used to measure performances of MSEs. The findings suggested that the majority of MSEs in Ethiopia were engaged in manufacturing and urban agriculture sectors with a share of 48.53% and 26.76% of the total, respectively. Paired t-test analysis of the study confirmed that there was a significant difference between the sales, total asset, employment and net profit performance of MSEs after microcredit loan. The study concluded that loan size, savings and entrepreneurship training had a significant positive effect on the performance of MSEs. It is suggested that microfinancial institutions should strengthen their existing policies and strategies to increase credit to MSEs, enhancing the modalities of entrepreneurship training and mobilizing savings to achieve the envisioned targets of reducing unemployment and promoting the growth of MSEs in Ethiopia.

The Impact of Micro and Macro Environment on Entrepreneurial Success: Case of J&K MSMEs

“…Second, the article highlighted the impact of MSMEs’ BS on PSED, which confirms that MSMEs business success leads to PSED in J&K (UT). The results of the present study are consistent with other studies in different economies (e.g., Adekunle et al, 2018; Chinweuba & Sunday, 2015; Olowe et al, 2013; Semegn & Bishnoi, 2021). Third, though the impact of EE on BS and the impact of BS on PSED have been studied in different economies, the relationship among the three constructs has not been examined so far in the Indian context.…”

“…MSMEs are the backbone of many economies throughout the world, generating income and employment for a significant number of people (Shafi et al, 2020). They serve as hubs for more jobs, market-based economic growth, poverty reduction and democratization in emerging nations (Anne, 2014; Semegn & Bishnoi, 2021). Numerous researchers have displayed that entrepreneurship is not merely valuable but fundamental to a healthy economy (Henry et al, 2003).…”

“…MSMEs play a critical part in all countries’ economic development and progress (Rizal et al, 2017). Small and medium businesses (SMEs) play a key role in creating and sustaining global economic growth and equitable development (Semegn & Bishnoi, 2021). In emerging nations, SMEs serve as hubs for more jobs, market-based economic growth, poverty reduction and democratization (Adekunle et al, 2018; Anne, 2014).…”

Microfinance towards micro-enterprises development in rural Malaysia through digital finance

“…According to the Aisaiti et al [ 5 ], digital finance refers to new business models in the financial industry that are fueled by large artificial intelligence, datasets, cloud computing, and other cutting-edge technology. Microfinance's major objective is to expand consumer breadth, availability, and satisfaction of services in order to satisfy the growing financial needs of poors in the BOP market [ 23 ], including MEs, to acquire appropriate services at a reasonable interest rate in a simple, effective, and safe way [ 30 , 74 ]. Artificial intelligence, the internet, cloud computing, and big data have all become more popular academic topics, resulting in the emergence of a new idea known as Fintech [ 12 ].…”

Profitability of Agricultural Micro and Small-Scale Enterprise in North Wollo Zone, Amhara Regional State, Ethiopia

“…The integration of classical firm growth literature into the inclusive finance—enterprise growth discourse improved insight into the trajectories of small enterprise growth in SSA (Eton et al, 2021; Kuada, 2021). Micro Finance Institutions (MFIs) help Micro and Small Enterprises (MSEs) to increase profits, total asset and employment through the expansion and diversification of their operation (Semegn & Bishnoi, 2021). The financing structure affects the profitability of micro and small enterprises.…”