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

Author

Listed:
  • Betgilu Oshora

    (Doctoral School of Economics & Regional Science, Hungarian University of Agriculture and Life Sciences, Páter Károly u. 1, 2100 Gödöllő, Hungary)

  • Goshu Desalegn

    (Department of Accounting and Finance, Faculty of Business and Economics, Kotobe Metropolitan University, Addis Ababa P.O. Box 5563, Ethiopia)

  • Eva Gorgenyi-Hegyes

    (Doctoral School of Economics & Regional Science, Hungarian University of Agriculture and Life Sciences, Páter Károly u. 1, 2100 Gödöllő, Hungary)

  • Maria Fekete-Farkas

    (Szent Istvan Campus Institute of Economic Sciences, Hungarian University of Agriculture and Life Sciences, Páter Károly u. 1, 2100 Gödöllő, Hungary)

  • Zoltan Zeman

    (Szent Istvan Campus Institute of Economic Sciences, Hungarian University of Agriculture and Life Sciences, Páter Károly u. 1, 2100 Gödöllő, Hungary)

Abstract

The study examines the determinant factors that influence financial inclusion among small and medium enterprises (SMEs) in Ethiopia. The study uses an explanatory research design and a mixed research approach with both primary and secondary sources of data. 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 the costs of borrowing negatively affect the firm’s access to finance. This study suggests concerned bodies sustain rapid and inclusive economic growth and hence eradicate extreme poverty and hunger, the policymakers must build an efficient, strong, and well-functioning financial market system that provides affordable and sustainable financial service to SMEs.

Suggested Citation

  • Betgilu Oshora & Goshu Desalegn & Eva Gorgenyi-Hegyes & Maria Fekete-Farkas & Zoltan Zeman, 2021. "Determinants of Financial Inclusion in Small and Medium Enterprises: Evidence from Ethiopia," JRFM, MDPI, vol. 14(7), pages 1-19, June.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:7:p:286-:d:580299
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    References listed on IDEAS

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    7. Shahid Manzoor Shah & Amjad Ali, 2022. "A Survey on Financial Inclusion: Theoretical and Empirical Literature Review," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 310-330, December.

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