DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

THE ROLE OF MICROFINANCE INSTITUTION IN CREATING

JOB OPPORTUNITY ( IN CASE OF DEBRE MARKOS TOWN
ACSI).

A RESEARCH PAPER SUBMITTED TO THE PARTIAL

FULFILLMENT FOR REQUIREMENT OF BACHELOR OF ARTS
DEGREE IN MANAGEMENT.

SUBMITTED BY ID

1, ADDISU ABEBAW………………...............4282/08

2, DAWIT FISHA……………………………...4313/08

3, BIRTUKAN MENALU…………………….4310/08

4, DEJE MEKURIA…………………………..4515/08

5, ABEBAYEHU HAILE…………………….4275 /08

ADVISOR: SOLOMON K. (MBA)

June 2018

Debre Markos, Ethiopia

 ACKNOWLEDGMENTS

First of all we would like to thank the almighty God. Next our deep gratitude goes to our
adviser Solomon kidane, who assists us in providing necessary guide for this research study.
In addition, we would like to thank the manager of amhara credit and saving institution Debre
Markos branch and all entrepreneurs, who were very cooperative in providing the necessary
data and information to carry out this research.

We greatly thanks for our family; they had been assisted our schooling life and to give advice
how we can goes with our planning activity to finish academic schooling in this university.
Finally we would like to acknowledge all individual and institutions that have helped us
materially and morally during the preparation of this paper.
 ABSTRACT

The research was conducted on the role of micro finance institution in creating job
opportunity, in a case study of Debre markos town. The main purpose of the study is to
investigate major role of micro finance institution on creating job opportunity. The
researchers used primary data and secondary data to complete the study effectively. For
primary data a questionnaire is developed based on the research problem identify and
distribute to the target group of the study. The target group of the study was entrepreneurs.
The total population of the study was 150 the researcher used simple random sampling
technique. It is easy to select among entrepreneurs to distribute questionnaires and to collect
the necessary data. The researchers took 60 entrepreneurs. Descriptive types of data analysis
used to interpreted data. The collected data was processed by adjusting, classifying and
correcting easily. At the end of research study the conclusion, recommendation summary was
stated. In conclusion part the data analyzed and interpreted shows that the all of respondents
were the user of amhara credit and saving institution. The researchers recommended like:
amhara credit and saving institution should give emphasis to increase the level of clients
income through preparing training to the clients of the institution regarding how to invest the
loan they receive how increase the habit of saving in their day to day business activity. The
institution should have to expand the established enterprise to create job opportunity
available in the town
 List of acronyms

ACSI- amhara credit and saving institution

MFIS-microfinance institutions

AEMFI-association of Ethiopia in micro finance institution

SSME-small scale micro enterprise

NBFI-national banking financial institution

 Table Content

Contents Page

Acknowledgement -------------------------------------------------------------------------------

Abstract ------------------------------------------------------------------------------------------

Acronyms------------------------------------------------------------------------------------------

Table of content ----------------------------------------------------------------------------------

List of table ---------------------------------------------------------------------------------------

CHAPTER ONE

1. Introduction ----------------------------------------------------------------------------------

1.1. Background of the organization ------------------------------------------------------------

1.2. Background of the study----------------------------------------------------------------------

1.3 Statement of the problem ---------------------------------------------------------------------

1.4 Objectives the study --------------------------------------------------------------------------

1.4.1 General objectives --------------------------------------------------------------------------

1.4.2 Specific objective ------------------------------------------------------------------------------

1.5 Significance of the study -----------------------------------------------------------------------

1.6 Scope of the study --------------------------------------------------------------------------------

1.7 Limitations of the study ---------------------------------------------------------------------------

1.8 Organizations of the paper -------------------------------------------------------------------------

 CHAPTER TWO

2. Literature review -----------------------------------------------------------------------------------

2.1. General overview of micro finance --------------------------------------------------------------

2.2. Micro finance in Ethiopia --------------------------------------------------------------------------

2.3. Credit creates an employment opportunity -------------------------------------------------------

2.4. Credit helps to raise productivity of net income -------------------------------------------------

2.5. Saving in mobilization -----------------------------------------------------------------------------

2.6. Providing new job ------------------------------------------------------------------------------------

2.7. Role of micro finance in economic development ----------------------------------------------

2.8. Financial needs and financial service -----------------------------------------------------------

2.9. The difference between microfinance and micro credit -------------------------------------

2.10. The client of microfinance ---------------------------------------------------------------------

2.11. Service for micro entrepreneurs ---------------------------------------------------------------

2.12. Benefit of saving facilities for the poor -------------------------------------------------------

2.13. Borrowers use micro credit loans --------------------------------------------------------------

2.14. Kind of institution delivers micro finance ----------------------------------------------------

2.15. Micro finance helps the poor --------------------------------------------------------------------

2.16. An equal employment opportunity policy-------------------------------------------------------

CHAPTER THREE

3. Research methodology ---------------------------------------------------------------------------------

3.1. Research design --------------------------------------------------------------------------------------

3.2. Data type and source --------------------------------------------------------------------------------

3.3. Method of data collection ---------------------------------------------------------------------------

3.4. Target population and sampling technique -------------------------------------------------------

3.5. Sample size -------------------------------------------------------------------------------------------

3.6. Data analysis and presentation---------------------------------------------------------------------

CHAPTER FOUR

4. Data presentation, analysis and interpretation -----------------------------------------------------

4.1. Demographic characteristics of the respondent ---------------------------------------------------

4.2. Micro finance and job opportunity -----------------------------------------------------------------

4.3. Benefit of micro finance ----------------------------------------------------------------------------

4.4. Micro finance and establishment of enterprise --------------------------------------------------

CHAPTER FIVE

5. Summary, Conclusion and recommendation -----------------------------------------------------

5.1. Summary of major finding--------------------------------------------------------------------------

5.2. Conclusion -------------------------------------------------------------------------------------------

5.3. Recommendation ------------------------------------------------------------------------------------

Reference--------------------------------------------------------------------------------------------------

Appendix---------------------------------------------------------------------------------------------------
 List of tables

Contentspage

Table 4.1.demographic characteristics of the respondents------------------------------------

Table 4.2.micro fiancé and job opportunity----------------------------------------------------

Table 4.3.benefit of the enterprise---------------------------------------------------------------

Table 4.4.life standard of the enterprise---------------------------------------------------------

Table 4.5.establishment of enterprise------------------------------------------------------------

 Chapter one

Introduction

1.1 Background of the organization

Amhara credit and saving institution was established in legal registered by the national bank
of Ethiopia in 1987.Based on commercial code of Ethiopia and proclamation NO 40/1996.
Amhara credit and saving institution in Debre Markos town is like any other micro finance
institution situated anywhere within Amhara regional state they amid to give credits to large
number of young working population in order to improve their economic status through the
chance of job creation and become economically self-independent. The institution has
specific objective of:

● Improving social condition of the people.

● Providing sustainable development finance to low income people.
● To encourage and promote saving habit of individuals.
In this regard the institution is decisive role in terms of reducing poverty in Amhara
region in general and in East Gojjam zone in particular. However there are many
problems with regard to its implementation to achieve its establishment goal. This
problems are sourced from, officials, procedures and illiteracy of customers of the
institution. There for the involvement of stakeholders to solve this problem is still in
sufficient.

1.2 Background of the study

Micro finance institutions are the main way of life for majority of developing countries like
Asia, Africa and Latin America in case of Africa as it is under developed and highly affected
by Population growth beyond their economy and population growth are not balanced with
economic growth. In order to reduce such problem under developed countries shall be
introduce the expansion of micro finance institution sector in their economy. When micro
finance institution sector expand (parallel) to economy growth there is high opportunity of
employment creation (yunus, 2003).

More over microfinance institution is a financial institution that provides services for poor
and low income clients. In other words micro finance institution is the provision of small
loans to poor people to help them engage in productive activities or grow very small business
(yunus, 2005).

When come to the realty in Ethiopia like other sub-Saharan African countries the socio
economic. Situation of Ethiopia is characterized by low growth of income. Some of the
problems are social services high population growth, economic in efficiency on high
unemployment etc. micro finance is relatively new industry which arose in the early 1980,
after the faller of the government delivery at subsidized credit to poor people microfinance
there come in as a beginning of seeking effective market orient solutions to the provisions of
sustainable and effective financial resources for poor groups of people who do not have
access to financial services from formal government and private institution (Amha,
2002).Could reduce the rate of unemployment.

1.3. Statements of the Problem

The expansion of microfinance institution has capacity to enable the unemployment’s to have
their own source of income and get relief from dependents. Self-employment can be also an
entrepreneur (Batra, 2003).

In addition to reduction of unemployment and income generation microfinance institution

also serve as an input towards sustainable industrial growth to create job opportunity and
decrease unemployment (Yunus, 2005).

The expansion of micro finance institution is unquestionable measure those microfinance

institutional are stepping stone for economic growth and development as it provide the
provision of loans to small scale business as well as for poor clients to help them engaging in
productive activities (Bhatia, 2004).

More over the institution is participating in the struggle of unemployment redaction by

creating job opportunity in Debre markos town assumed to enable the client to develop their
saving culture to participate in economic activities and enhance level of income .
(microfinance, 2006) .

According to researchers idea there is no any research doing in Debre markos town on the
role of micro finance institution in creating job opportunity .So this research was helped the
society of study area by motivating them in doing in this sector and by creating awareness in
the society in regarding to this sector.
Regarding to the study the researchers raised the following research question

1, what are the contribution of amhara credit and saving institution in debre markos town for
graduate students?

2, how micro finance institution helping business owners to have their own source of
income?

3, what is the role of amhara credit and saving institution for society in debre markos town?

1.4 objective of the study

The researchers aimed to attain the following general and specific objective.

1.4.1 General objective

The general objective of the study is to assess the role of microfinance institutions in creating
job opportunity in debre markos town ACSI.

1.4.2 Specific objective

1. To assess the contributions of amhara credit and saving institution in debre markos town
for graduate students.

2. To examine micro finance institutions in helping business owners to have their own source
of income.

3. To assess the role of amhara credit and saving institutions for society in debre markos
town.

1.5 significance of the study

As our country is one of the least Developed and have rapid growth of people with increase
in the rate of unemployment. Assessing the role of microfinance institution to create job
opportunity will have the following significance.

The first purpose of the study is to support the researcher’s additional theoretical knowledge
with practical work and also served as reference material for other researchers who wants to
conduct further study in the same topic.
1.6 scope of the study

The study focused on the role of micro finance institution in creating job opportunity is
difficult in the whole financial institutions in debre markos town. Because of large number of
financial institutions, shortage of time and capital to complete the study. So the study focused
on or limited in debre markos town ACSI.
1.7 limitation of the study

There are some limitations that the researcher faced as a challenge while conducting this
study. These limitations are stated as follows:-

1. Lack of experience for the researchers.

2. Lack of up to date literature that related to the study.

3. The unavailability of secondary data in the organization.

4. Lack of cooperation and interest of respondents in responding to questionnaire and filling

it’s carefully.

1.8 organization of the paper

The study was include five chapters; chapter one is an introduction chapter and it includes
introduction, background of the organization, background of the study, statement of the
problem, objective of the study, significance of the study, scope of the study, and limitations
of the study. Chapter two deals with reviews of related literature; chapter three, methodology
of the study and the fourth chapter includes analysis and interpretation. Finally, the fifth
chapter includes conclusion and recommendation.
 CHAPTER TWO

2. LITERATURE REVIEW

2.1 General overview of micro finance

What is micro finance?

Micro finance is often defined as financial services for poor and low income clients altered
by different types of service providers. In practice the term is often used more narrowly to
refer to loans and other services from providers that identify themselves as “micro finance
institutions” (MFIS).

This institution commonly tend to use new methods developed over the last 30 years to
deliver very small loans to non-salaried borrowers, taking little or no collateral.

This method include group lending and liability, pre-loan savings requirements, gradually
increasing loan size, and an implicit guaranteed ready access to future loans if present loans
are repaid fully and promptly. More broadly microfinance refers to a movement that envision
the world in which low income households have a permanent access to arrange of retail
providers to finance income –producing activities, build assets, stabilize consumption and
protect against risks.

These services include saving, credit, insurance, remittance, and payments, and others
(Johnson, 2003).

Micro finance is based on the promise that the poor have skill witch remains unutilized. It
creates dependency and takes away the individuals institute to break through the wall of
poverty. Creativity in each human being is to answer to poverty.

Micro created belongs to the group of financial service innovation under the term micro
finance. Other service to micro finance is a micro saving, money transfer and micro insurance
microcredit is innovation for developing countries. Micro credit is a service for poor people
that are unemployed entrepreneur or farmers who are not bankable by helping people with
micro credit it give them more available or sustain in an income and often began to build up
wealth and exit poverty (yunus, 2003).
Microfinance is usually understood to entail the provision of financial services to micro
entrepreneurs and small businesses which lack access to banking and related service due to
the high transaction costs associated with serving these client categories.

The two main mechanisms for delivery of financial services such clients are relationship
based banking for individual entrepreneurs and small businesses and group based models
where several entrepreneurs come together to apply for loans and other services as a group.

● In some regions, for example Southern Africa microfinance is used to describe the
supply of financial services to low income employees, which is closer to the retail
finance model prevalent in mainstream banking.

● Micro finance is abroad category of services, which includes micro credit. Micro credit
is provision of services to poor clients. Micro credit is one of the aspects of micro
finance, conflation of the two terms is endemic in public is course.

● Due to the broad range of microfinance services it is difficult to assess impact, and very
few studies have tried to assess its full impact. Proponents often claim that microfinance
lifts people out of poverty but the evidence is mixed (Johnson, 2003).

2.2 Micro finance in Ethiopia

Ethiopia is one of the sub Saharan countries which poverty is relatively evenly distributed
compared to other sub Saharan African countries.

The cause of wide deep rooted poverty includes natural disasters, shortage of access to
infrastructure and resources. It also argued that poor access to financial service is among root
cause of poverty in Ethiopia. Millions of people in Ethiopia suffer from lack of saving and
credit service (Horuvey, 2002).

The governmental organization known as association of Ethiopia in micro financial

institution (AEMFI) was established on June 1999 by obtaining a license from the ministry of
justice of federal government of Ethiopia. The aim of AEMFI is to see are reduced level of
poverty and increase level of consumption and ultimately wealth capital creation in Ethiopia
through un active intervention of current and future microfinance institution growing in to
different and substantial rural bank and micro finance bank.

AEMFI is committed to be support MFIs that can reach millions of poor Ethiopia that can
play active role as financial intermediaries and institutional investors (OCSSCO, 2007).
2.3 Credit creates an employment opportunity
The poor need assistance in accessing the resources required to develop their activity.

According to khandker, (2008) lack of saving and capital makes it difficult for many poor
people who went jobs in the farm and non-farm sector to become self-employed and to
undertake productive income generating activities.

As world banks study has indicated that the number of poor people in sub Saharan Africa has
increased significantly.

The largest segment of this population is unemployed or self-employed. In such situation,

credit provides and substantial employment opportunities at all level of skill through
establishment of income Generating activates (EBR, 1993).

2.4 Credit helps to raise productivity of net income

Credit has a great potential to re movement of the associated constraints faced by the poor.

To majority of population in this sector needs credit either for starting up small business or
for the expansion of the existing.

They must proceed to accumulate before they purchase material inputs for their business
(Yunus, 2008).

2.5 saving in mobilization

Saving service not only provide valuable finance as assistance to low income clients but also
strengthen institutional self-efficiency membership commitment to micro financial initiative
and build a service discipline, self-esteem and wellbeing. Saving mobilization in Ethiopia is
becoming integral part of available micro credit delivered system such that the link between
saving and credit prompted food production and foods security (Horvey, 2008).

2.6 Providing new job

As population and economy grow smalls scale micro enterprise (SSME), provides new job
opportunities.

They use more unskilled labor force than the large ones. If they dispersed in rural areas, they
help to reduce the flow of unemployed people from the rural areas to urban centers. They are
the center of initiative and source of innovation to improve the countries productivity (Hailey,
2003).
2.7 Role of micro finance in economic development
As credit plays a vital role in beginning and expanding the business, microfinance has been
treated as an important tool for economic development.

Micro finance plays a vital role in economic development though the following ways.

Job creation: a business that start and operates because of microfinance did can create job in
equal number as those created by multinational corporations.

Financial stability: one of the greatest role microfinance has played by providing financial
stability to people which contributed to a local economics in substantial extent. Global
poverty: the supporters of micro finance believe that offering financial stability to poor and
low income financial through small loans may break the poverty cycle for future generation.
(Amha, 2002).

2.8 Financial needs and financial services

In developing economies and particularly in the rural areas many activities that would be
classified in the developed world as financial are not monetized; that is money is not used to
carry them out. Almost by definition poor people have very little money. But circumstances
often arise in their lives in which they need money or the things money can buy. In start
rather fords recent book. The poor and their money hesitate several types of needs life cycle
need such as weddings, funerals, childbirth, education, home building widow hood, old age,
(Amha, 2002).

2.9 The difference between microfinance and microcredit

Micro credit refers to very small loans for unsalaried borrowers with little or no collateral,
provided by legally registered institutions currently; consumer credit provided to salaried
workers based on automated credit scoring is usually not included in the definition of micro
credit, although this may change. Micro finance typically refers to arrange of financial
services including credit, savings, insurance, money transfers, and other financial products
provided by different service providers targeted at poor and low income people. Micro credit
different from other targeted development ending in addition to the new techniques explained
in the micro credits approach has tried to avoid the pitfall of an earlier generation of targeted
development landing. The approach focus on fostering batter repayment discipline and
changing in to rest rates that cover the cost of credit delivery, both of which support
development of sustainable institutions that can continue to expand their services in the future
(batra, 2004).

2.10 The clients of Microfinance

The typical microfinance clients are low income person that do not have access to formal
financial institutions microfinance clients are typically self-employed after household based
entrepreneurs. In rural areas, they are usually small farmers and others who are engaged in
small income generating activities such as food processing and petty trade. In urban areas
microfinance activities are more diverse and include shopkeepers, service providers artisans
street vendors etc., microfinance clients are poor and vulnerable non poor use have relatively
stable source of income (clark, 2003).

2.11 services for micro entrepreneurs

Leaving poverty does not depend on repaying one’s loans leaving poverty depends on
creating a successful business. Yet to a few my focus on helping their clients use their loans
to create successful business some that shifted to client centered approach appear to have had
more success.

Beyond financial services most MFIs other basic loan to repayment training. Generally the
training is limited to emphasizing the importance of repaying the loan and of applying the
loan to the business rather than spending it on personal needs. Yet clients often race health
emergencies and family crises and also went to spend some of the loan proceed on education.
(Dr, gebretisay, 2003).

2.12 Benefits of saving facilities for the poor

The clients perfective saving such as credit facilities are important tools for efficient liquidity
management. Virtually all people will save in any given time and face a portfolio decision
with regard to different savings options. The advantage that deposit facilities show over
informal savings is a good mix of accessibility to cash security land rate of return and
divisibility of saving. In kind saving such as gold, Jewelry or live stack requires time to be
converted in to cash. (GebreHiwot, 2006)

2.13 Borrowers use micro credit loans

Many credit borrowers have micro enterprises unsalaried in formal income Generating
activities. However, micro loans may not predominantly be used to start or finance micro
enterprises. Scattered research suggests that only half or less of loan proceeds are used for
business purposes. The remainder supports a wide range of household cash management
needs, including stabilizing consumption and spreading out large, comply cash needs like
education fees, medical expenses or life cycle events such as wedding, and funerals (Johnson,
2003).

2.14 Kinds of Institution deliver micro finance

Most of MFIs started as not for profit cooperatives, and state owned development and postal
savings banks. An increasing number of MFI are now organized as for profit entities often
because it is a requirement to obtaining a license from national banking financial institutions
(NBFI) commercial banks that specialize in micro finance or micro departments of full-
service bank. Some micro finance institutions provide non-financial products such as
business development for health services (Johnson, 2005)

2.15 Microfinance help the poor

The impact of micro credit has been studied more than the impact of other forms of micro
finance micro credit can provide arrange of benefits that poor households highly value
including long term increases in income and consumption. Harsh aspect of poverty is that
income is often irregular and unpredictable. Access to the credit help the poor to smooth cash
flows and avoid periods were access to food, clothing shelter or education is last. Credit can
manage it easier to manage shocks like sickness a few age earner, theft or natural disasters.

The poor use credit to build up assets such as buying land, which gives them future security.
Women participate in the microcredit programs often experience important self-
empowerment. (Johnson, 2003)

2.16 An equal employment opportunity policy

An equal employment opportunity policy is a commitment to engage in employment
practices and procedures’ which do not discriminate and provide equality between
individuals of different groups or sex to achieve full,
 CHAPTER THREE

3. RESEARCH METHODOLOGY

3.1 Research Design

Descriptive method of research would be used to assess the role of microfinance institutions
to create job opportunity in debre markos town ACSI.

3.2 data type and source

In the study both primary and secondary type of data would be used. Primary data include
questioner and secondary data contains manuals, documents, research outputs on similar
topic, periodic and annual report of the organization with provide the researchers full
information.

3.3 Methods of data collection

The data collection instrument that researchers used for primary data is questionnaires.
Questionnaires would be distributed for simple respondent in order to acquire adequate and
necessary data for the study. On the other hand the data collection tools for collecting
secondary data are document review, any records and written materials of the organizations.

3.4 Target population and sampling technique

The target population of this study comprises 150 micro entrepreneurs in Debre Markos
town. Who they are acquire financial services from ACSI. Simple random sampling method
would be used as a sampling technique.

3.5 Samples Size

It is known that much information would obtain from huge number of respondents. But
because of shortage of time and budget the researchers would select 60 Respondents. From
the total population by using the following formula the formula set by Michael (1960).to
show mathematically assuming the level of confidence to be 90% and the level of error to be
10%.
 N
n=
1+ N ¿ ¿

Where n= total sample size

N=total population

e=sample error (10%)

n=150/1+150(0.1)2

n=60

3.6 Data Analysis and presentation

After the data would collect and organized, it would present through table. Then the data has
analyzed qualitatively and quantitatively. The quantitative analyses were through frequency
and percentage.
 Chapter four

4. Data Presentation, Analysis and interpretation

This chapter deals with data presentation, analysis and interpretation of the results. The
researchers used questionnaires as a method of data collection tools. Hence 60 questionnaires
were distributed to respondents and 60 of them were returned. The collected data presented
through table and analyzed by using frequency and percentage.

4.1Demographic Characteristics of the respondents

Table 4.1 demographic characteristics of the respondents

No Item Frequency Percentage %

1 Sex

Male 37 61.7

Female 23 38.3

Total 60 100

2 Age

Less than 20 10 16.7

20-25 35 58.3

26-30 10 16.7

Above 30 5 8.3

Total 60 100

3 Marital status

Single 39 65

Married 18 30

Divorced 3 5
 Widowed -- --

Total 60 100

4 Education level

Complete grade 10 20 33.3

Complete grade 12 13 21.7

Diploma 9 15

Degree and above 18 30

Total 60 100

Source: compiled from the questionnaire collected in 2018

The researchers can understand from the above table 4.1 item 37(61.7%) of respondents were
male and the reaming 23(38.3%) were females. This indicates from the total number of
responds, more than half were male respondents.

As it can be seen from the a above table 4.1, 10(16.7%) were found in less than 20 were as
35(58.3%) were found between 20-25 age interval, were as 10(16.7%) of them were between
the age 26-30 and 5(8.3%) were 31 and above years therefore, this data shows that almost
there are more adult respondents were involved in the study.

The table 4.1 depicts the marital status of the respondents as it was shown, 39(65%) were
single. were as 18(30%) were married and 3(5%) were divorced. this shows that more than
half of the respondents were not married.

The above table 4.1 item 4 shows the educational level of the respondents. In terms of their
education 20(33.3%) were complete grade ten, 13(21.7%) were complete grade twelve,
9(15%) were diploma holders and the remaining 18((30%) were degree and above holders.
As the data indicates the majority of the respondents were educated.
4.2 micro finance and job opportunity

Table 4.2 Microfinance and job opportunity

No Items Frequency Percentage

%

1 Do you think that microfinance service Yes 55 91.7

is necessary to create job opportunity?
No 5 8.3

Total 60 100

2 Do you think that microfinance play Yes 53 88.3

pivotal role to minimize the level of
No 7 11.7
unemployment?
Total 60 100

3 What is the way that ACSI is used to Financing Your 18 30

create job opportunity? enterprise
giving Loan 12 20

Forming small 16 26.7

Scale enterprise
Credit and 14 23.3
saving
If Other -- --

Total 60 100

4 Do you have a job before being the Yes 25 41.7

client of ACSI?
No 35 58.3

Total 60 100

5 Does amhara credit and saving Yes 60 100

institution encourage you to have a job?
No -- --

Total 60 100
Source: compiled from the questionnaire collected in 2018

As it is understandable from the above table 4.2.Item one, 55(91.7%) of the respondents were
replied that microfinance is necessary to create job opportunity, while 5(8.3%) of them were
answered no in general. it reveals that microfinance service is necessary to create job
opportunity a said it is not necessary. It is possible to conclude that many of the respondents
become a job holder through the service of microfinance.

from the above table 4.2 item two, 53(88.3%) of the respondents were replied that
microfinance play a pivotal role to minimize the level of unemployment, while 7(11.7%) of
them were answered no in general, it indicated that almost in all microfinance play a crucial
role to minimize the level of unemployment.

From the same table item three shows that 18(30%) of respondents said that financing your
enterprise is the way that ACSI is used to create job opportunity and 16(26.7%) of the
respondents responded that on the other way to create job opportunity is by forming small
scale enterprise, 14(23.3%) of them justified credit and saving is also one way of create job
opportunity and the remaining, 12(20%) of them revealed that giving loan is also another
means to create job opportunity. So from the above presented data it is importunity to
conclude that financing enterprise is the best way to create job opportunity among the other
ways ACSI used.

Item four of the above table indicated that 25(41.7%) of respondents answered that they have
job before being the client of ACSI, while 35(58.3%) of them replied that they have no job
before the client of ACSI. the researchers conclude that majority of the respondents have no
job before being the client of ACSI.

The last item of the above table indicates that 60(100%) of respondents answered that
encouraged by ACSI to have their own job. This indicates that all of the respondents
encouraged by ACSI to have their own job.

At the end we raised some open ended questions regarding to micro finance and creating job
opportunity and the respondents tried to answer the following questions.

1. How ACSI creates job opportunity

 ✓ Forming small-scale enterprise
✓ By giving credit and saving service.
2. What types of works created by ACSI?

✓ Wood and metal works(furniture)

✓ Chicken production
✓ Animal fattening
✓ Garage
✓ Urban farming
3. What is the contribution of ACSI to your job?

✓ ACSI providing startup funding and the ongoing operation costs.

✓ ACSI provides the supervision service.
✓ ACSI provides training that have related to our business process and our customer
satisfaction.
4.3 Benefits of Microfinance

Table 4.3 benefits of the enterprisers

No Items frequency Percentage %

What type of service do you get Loan 26 43.3

1 From ACSI? Counseling 7 11.7

Training 5 8.3

Credit and saving 22 36.7

Other -- --

Total 60 100

2 Are you benefited from ACSI? Yes 55 91.7

No 5 8.3

Total 60 100

3 Does amhara credit and saving Yes 49 81.7

 institution deliver financial No 11 18.3
service?
Total 60 100

4 Do you think that ACSI have Yes 60 100

great role to the society?
No -- --

Total 60 100

5 If your answer is yes from item Reduce 29 48.3

4 which one is more contribute unemployment
to the society?
Reduce crime 3 5

Reduce addiction 6 10

Increase saving 22 36.7

habit

Total 60 100

Source: compiled from the questionnaire collected in 2018

From the above table 4.3 item one observe that 26(43.3%) of the respondent said that they get
loan from ACSI, 7(11.7%) of them got only counseling and 5(8.3%) of the respondents have
been got credit and saving service. Therefore it is possible to generalize loan is the most
service than other services that delivered by ACSI.

The second item from the above table 4.3 indicate that 55(91.7%) of respondent answer that
benefited from ACSI. Were as 5(8.3%) of respondent answer not benefited from ACSI. This
indicates that majority of the respondents get benefit from ACSI.

The third item from the above table 4.3 shows that 49(81.7%) of respondent were said that
ACSI has deliver financial services. While 11(18.3%) was ACSI not deliver financial
services therefore the researchers conclude that ACSI delivered financial services to the
enterprisers.

From above table 4.3 item four indicates that all respondents 60(100%) were said that ACSI
have great role to the society.
The last item of the above table 4.3 indicates that 29(48.3%) of the respondents said that
reduce unemployment, 3(5%) of respondent said that reduce crime, 6(10%) of respondents
said that reduce addiction and 22(36.7%) of the respondent answered increase saving habit.so
from the above presented data the researchers conclude that ACSI more working reduce
unemployment.

At the end we raised some open ended question regarding with benefits to the respondents.

1. What are the benefits you get from ACSI?

✓ Entrepreneurs can support their families by financially.
✓ Entrepreneurs can support them self by improving life standards.
✓ Entrepreneurs can remove take drug and save their money and time by getting
job opportunity.
Microfinance services is delivered to poor people’s those who have no ability to
access financial services like loan, credit and saving and others when those
unemployment peoples have got a chance to access microfinance they become job
holder and self-employed peoples. As a result, they are more benefited from the
cooperation of microfinance to their enterprises

Table 4.4 Life Standard of the enterprisers

No Items Frequency Percentage %

1 Are there any change/Progresses Yes 52 86.7
after being the user of ACSI? No 8 13.3
Total 60 100
2 How do you rate the contribution of Very high 3 5
ACSI to your income
High 16 26.7

Medium 32 53.3

Low 7 11.7

Very low 2 3.3

 Total 60 100

Source: compiled from the questionnaire collected in 2018

Table 4.4 item one revealed that 52 (86.7%) of respondents were improved their life standard
after the user of ACSI. And 8(13.3) respondents are not any change or progress there life
Therefore it is important to generalize that there is a developmental change of life standards
and day to day activity of respondents.

The second item from the above table revealed that 3(5%) of respondents said that the
contribution of ACSI to their income was very high, 16(26.7%) of the respondents said that
the contribution of ACSI to their income was high, 32(53.3%) of the respondents said that the
contribution of ACSI to their income was medium, 7(11.7%) of the respondents were low
income and 2(3.3%) of the respondents were very low income.so it possible to generalize that
the contribution of ACSI to the enterprisers was medium. This implies that the respondent’s
income was improved in a medium rate.

4.4 Microfinance and establishment of enterprises

In Debre markos town there is the establishment of enterprises, some enterprises are formed
by amhara credit and saving institution.

Table 4.5 Establishment of enterprise

No Items frequency Percentage %

1 Does ACSI Strive to support the Yes 59 98.3
establishment of enterprise of No 1 1.7
cooperatives? Total 60 100
Source: compiled from the questionnaire collected in 2018

In the above table 4.5 item one at a presented shows that 59(98.3%) of the respondents said
that ACSI to support the establishment of the enterprises, 1(1.7%) of the respondents said that
ACSI cannot support the establishment of enterprise. From the above table can understand
that microfinance had a great role to establish enterprises.

At the end we raised 1 open ended question regarding to the cooperation of micro finance
institution to small scale enterprises.
1. What is the cooperation of micro finance institution to small scale enterprisers?

And the respondent tried to answer the following descriptions.

 The cooperation of microfinance to small scale enterprises very necessary. Because

without micro finance institutions our business cannot start. ACSI give financial service
to small scale enterprise. They get different benefits like training, credit and saving,
counseling, loan etc…so it was generalize that ACSI have great cooperation to small
scale enterprise.
Finally we try to request the respondents about the problems of ACSI regarding with job
creation. Some respondents said that ACSI have different problems during the creation of job
opportunity. Some of these are:

✓ Not get adequate finance to start the business

✓ Bias of some employees
✓ Not get service at a scheduled time and Lack of skilled man power.
 Chapter Five

5. Summary, Conclusion and Recommendation

5.1 Summary of major Findings

From the result of the study the researchers finds the following major findings

 The study findings have also clearly shows that there is the service of ACSI in Debre
markos town to create job opportunity and from the service the majority of the
respondents were benefited and become job holder.

 Regarding the contribution of ACSI to enhancing client’s income is medium as the study
results shows from the data analyzed and interpreted.

 Concerning Microfinance and job opportunity most of the respondents, response shows
that the majority of them have no jobs before being the user of ACSI, but now they job
holder.

 As the result of the study shows the problem most the times facing in the institution were
not get adequate finance to start the business, Bias of some employees, not get service at
a scheduled time and Lack of skilled man power.
 As the majority the respondents respond that offer the amhara credit and saving
institution starts its operation in Debre markos town there is progress of change in
reduction of unemployment

 To create job opportunity ACSI forms small scale enterprises.

 As the result of the study shows that loan is the most service that ACSI is used to create
job opportunity.

 As a result of this study when unemployment decrease, saving habit increase, reduces
crime, reduce addiction therefore ACSI have great role to the society.
5.2 Conclusion

The study was tried to investigate the role of Microfinance in creating job opportunity in
Debre markos towns particularly, ACSI to assess the role of Microfinance the researchers
address points related to functions of ACSI in creation job opportunity, the way that ACSI
use to create job opportunity and to identify the target of users of Microfinance in doing so
researchers used both primary and secondary data a source of data for the study.

On the other hand the study includes questionnaire as an instrument of data collection. Data’s
were collected from the sample respondents of cooperative enterprises. To assess the role of
Microfinance in creating job opportunity in Debre markos town the researchers distributed it
60 questionnaires to wood and metal work, chicken production, animal fating, food
processing, garage and urban farming entrepreneurs. From distributed questionnaires 60 of
them were collected and were gathered from the entrepreneurs.

As a result of the study just likes that the role of Microfinance in creating job opportunity in
Debre markos town is significance and acceptable.

From the data analyzed and interpreted all of the respondents were the user of ACSI. The
researchers investigated the service of amhara credit and saving institution creates the way
that most of the male, female and unemployed youth become a job holder in Debre markos
town. Whenever, ACSI establishes enterprises give loan service credit and saving to the poor
people to create job opportunity there are some problems that face the institution.

These problems were not provide adequate finance to start the business for entrepreneur ,
Bias of some employees, not get service at a scheduled time and Lack of skilled man power .

ACSI should have to hire qualified manpower through recruitment to activate this system of
the institution regarding to service delivery to the customer and the institution should have to
implement technology based service by using computer system to clients to save their money.
5.3 Recommendation

The study was conducted on the role of microfinance in creating job opportunity in Debre
markos town amhara credit and saving institution. Based on the finding of the study in
relation to review literature and data analyses, the following recommendations are forwarded.

 It would be better, Amhara credit and saving institution office in Debre Markos town provide
financial support until it becomes strengthen entrepreneurs.
 Amhara credit and saving institution office in Debre Markos town must be encouraging all
participants in the business organization.
 Amhara credit and saving institution office in Debre Markos town must check those
entrepreneurs, whether they are profitable or not after providing finance, credit and training.

 Amhara credit and saving institution should have cooperate with small scale enterprises
through providing loans and give investment advice to cope the challenges face the
institution and as well as the enterprise them self.

 Amhara credit and saving institution should have control corrupt employees.

 It would be better amhara credit and saving institution increasing financial service for the
entrepreneur.
 Reference

 Batra and batra,(2013) entrepreneurship and small business management, 3rd edition, deep
publication, New Delhi Indian press

 Clerk,(2013) business and management research

 Gebrehiwotageba, (2008) micro and small enterprise (MEX) in Ethiopia empirical
evidence press.
 Hailey Gebretinsae, (2007), Entrepreneurship and small business management, 2nd edition,
Mekelle, Ethiopia.
 Hodgetts,(1998) Richard M Kuratko, Donald F.” entrepreneurship: A contemporary
approach”.4th edition, the Dryden press

 Woldia amhara, (2003) microfinance in Ethiopia, performance, challenge and role on

poverty reduction, 4th edition.
 Michael p: todaro, (2005) economic development, oxford university press.
 Mohammed yunus, (2005) faces of poverty, 3rd edition, Bangladesh University press.
 Woldia amhara, (2003) microfinance in Ethiopia, performance, challenge and role on
poverty reduction, 4th edition.
 World Bank, (1993) definition of micro and small enterprise, World Bank press.
 APPENDIX I

DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

Questionnaire to be filled by small scale enterprisers

Dear respondents!

The purpose of this questionnaires’ is to collect data that used to investigate the role of
microfinance insinuation in creating job opportunity. This data is requested only for
academic purpose and it is confidential. So the researchers kindly ask you to provide
necessary data because it plays significant role for the effectiveness of this study.

Thank you in advance for you cooperation:

Note:

 No need to writing your name

 Please put on “X” marks in the space provided or fill according to the
specific instruction given.
 Writ your answer on the space provided to you.

Part one; Personal information.

1. Sex: Male Female

2. Age: less than 20 20-25 26-30 31 and above

3. Marital status: single Married Divorced widowed

4. Educational background: complete grade 10 complete grade 12

Diploma degree and above

Part two: Questionnaires’ regarding the role of micro finance institution in creating job
opportunity.
1. Do you think that microfinance service is necessary to create job opportunity?

Yes No

2. If your answer for question NO 1 is “yes” how it creates job opportunity?

___________________________________________________________________________
___________________________________________________________________________
_________________________________________________________________________

3. What type of service do you get from amhara credit and saving institution?

Loan Counseling Training

Credit and Saving Others

4. Are you benefited from amhara credit and saving institution?

Yes No

5. If your answer is “yes” for question NO 4 what are these benefits?

_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
________________

6. Does you a job before being the client of amhara credit and saving institution?

Yes No

7. Is there any change or progress after being the user of Amhara credit and saving
institution?

Yes No

8. How do you rate the contribution of amhara credit and saving institution to your income?

Very high High Medium low Very low

9. Does amhara credit and saving institution encourage you to have a job?

Yes No
10. If your answer is “yes” for question No 9 in what work?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________
11. Does amhara credit and saving institution strive to support the establishment of
enterprises of cooperatives?

Yes No

12. What is the way that amhara credit and saving institutions used to create job opportunity?

Financing your enterprise forming small-scale enterprise

Credit and saving giving loan if others

13. Do you think that microfinance institution play a pivotal role to minimize the level of
unemployment?

Yes No

14. Does amhara credit and saving institution deliver financial services?

Yes No

15. If your answer is “yes” in question NO 14 what type of services it can provide?
___________________________________________________________________________
___________________________________________________________________________
______________________________________________

16. Do you think that amhara credit and saving institution have great role to the society?

Yes No
17. If your answer is yes from question 18 which one is more contribute to the society?

Reduce unemployment Reduce addiction

Reduce crime Increase saving habit

18. What are the contributions of amhara credit and saving institution to your job?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
_____________________________

19. What is / are the cooperation of microfinance to small scale enterprise?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
_____________________________________

20. Do you think ACSI have a problem in the creation of job opportunity, please write it on
the following provided space.

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
______________

Thank you dear respondents!