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

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  • Abiot Animaw Semegn
  • Narendra Kumar Bishnoi

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.

Suggested Citation

  • Abiot Animaw Semegn & Narendra Kumar Bishnoi, 2021. "Analysis of Effect of Microfinance on the Performance of MSEs in Amhara National Regional State, Ethiopia," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 30(1), pages 153-178, March.
    • Handle: RePEc:sae:jouent:v:30:y:2021:i:1:p:153-178
    DOI: 10.1177/0971355720974822
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    Cited by:

    1. Osamah Ahmed AL-Maamari & P Vedava & Noufal Alrefaei, 2023. "Micro and Small Enterprises in Developing Countries: What Hampers Growth?," Shanlax International Journal of Economics, Shanlax Journals, vol. 11(3), pages 1-10, June.
    2. Pascal Bougssere & Mamadou Toe & Wend-Kuuni Raïssa Yerbanga, 2024. "The influence of microcredit financing conditions on the financial performance of microenterprises in Burkina Faso," Post-Print hal-04692353, HAL.
    3. Charles Stephen Tundui & Hawa Petro Tundui, 2024. "Microcredit fungibility and effect on business performance among women entrepreneurs in Tanzania," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 14(1), pages 1-10, December.
    4. Rabinder Singh & Rajani Kumari Sarangal & Gurmeet Singh, 2022. "The Impact of Micro and Macro Environment on Entrepreneurial Success: Case of J&K MSMEs," FIIB Business Review, , vol. 11(1), pages 94-106, March.
    5. Ebrahim Endris & Andualem Kassegn, 2023. "Profitability of Agricultural Micro and Small-Scale Enterprise in North Wollo Zone, Amhara Regional State, Ethiopia," SAGE Open, , vol. 13(2), pages 21582440231, May.

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