COLLEGE OF BUSINESS ADMINISTRATION

DEPARTMENT: - BUSINESS ADMINSTRATION.

THE ROLE OF SAVING AND CREDIT INSTITUTIONS TOWARDS MEETING THE

FINANCIAL NEEDS Of ENTREPRENEURS! THE CASE OF ADDIS CREDIT AND
SAVING INSTITUTION.

BY

SHELEME ZEWDE

ADVISOR: MARGA M (PhD)

A Thesis Submitted to College of business administration Department of business administration

Rift Valley University, in Partial Fulfillment for the Requirements of Master’s Degree in
business administration.

May 20/2018

Addis Ababa Ethiopia

 Rift Valley University
College of Business administration, Department of Business administration

The role of saving and credit institutions towards meeting the financial needs of entrepreneurs!
The case of Addis credit and saving institution

By
Sheleme Zewde Tesamma

Thesis Submitted to College of business administration department of business administration

Rift Valley University, in Partial Fulfillment for the Requirements of Master’s Degree in
business administration

Advisor: Marga Mekuria (PhD)

May, 2018
Addis Ababa, Ethiopia
 DECLARATIONS

I Sheleme zewde, I.D number RVUMBAR/0042/17, do hereby declare that this thesis is my
original work and that it has not been submitted partially; or in full, by any other person for an
award of degree in any other university/institution.

Submitted By:
Candidate Full Name: Sheleme Zewde Tesemma

Signature: ---------------------------- Date: ----------------------------

Approved By:

This Thesis has been submitted for examination with my approval.

Name of Advisor: Marga mekuria (PhD )

Signature: ---------------------------- Date: ----------------------------

I
 APPROVAL
The undersigned certify that they have read and hereby recommend to Rift Valley University to
accept the thesis submitted by Sheleme Zewde and entitled “the role of saving and credit
institutions towards meeting the financial needs of entrepreneurs! The case of Addis credit and
saving institution” in partial fulfillment of the requirements for the award of a Master’s Degree
in Business Administration.

Submitted By:

Candidate Full Name: Sheleme Zewde

Signature: ---------------------------- Date: ----------------------------

Approved By:

Name of Internal Examiner--------------------------Signature-----------Date-----------

Name of External Examiner----------------------Signature--------------Date------------

Name of Head of Department-------------------Signature-----------------Date----------

II
ACKNOWLEDGEMENTS
Thanks to almighty God for the successful completion of this thesis. The completion of this
study would have not been realized without the help of others and I would like to take this
opportunity to thank everyone who helped and supported me.
I would like to greatly express my utmost gratitude to my advisor Marga mekuria (PhD) for his
guidance, continual advice and follow-up, concern, and review of the thesis. A great thanks and
special gratitude is also addressed to all employees in Addis Credit and Saving Institution and
entrepreneurs because of giving me the required data voluntarily to conduct my research.
Without their kind cooperation, this study would not have been complete and became a reality.
My warm appreciation and respect go to my friend Gurmessa chalchisa, Siyum Daba and
Bizunesh Chala for their invaluable contribution, and more importantly, their constructive
comments and guidance throughout the whole process of the thesis.
Last but not least, my indebted gratitude expressed to all of my families and friends for their
encouragement in completing this research endeavor.

Sheleme Zewde Tesemma

May, 2018

III
Table of Contents
DECLARATIONS.............................................................................................................................................I
APPROVAL...................................................................................................................................................II
ACKNOWLEDGEMENTS...............................................................................................................................III
LIST OF TABLE.............................................................................................................................................IV
LIST OF FIGURE............................................................................................................................................V
APPENDIX...................................................................................................................................................VI
LIST OF ACRONYMS...................................................................................................................................VII
ABSTRACT.................................................................................................................................................VIII
CHAPTER ONE: INTRODUCTION..........................................................................................................1
1.1. Background of the Organization.......................................................................................................1
1.2. Background of the Study..................................................................................................................2
1.2 Statement of the problem...................................................................................................................3
1.3 Objective of the Study.......................................................................................................................4
1.3.1 General Objective.......................................................................................................................4
1.3.2 Specific Objectives of the study..................................................................................................4
1.4 Research Questions............................................................................................................................4
1.5 Scope of the Study.............................................................................................................................5
1.6. Scope of the Study............................................................................................................................5
1.7. Limitation of the study......................................................................................................................5
1. 8. Significance of the Study.............................................................................................................6
1.9. Organization of the study..................................................................................................................6
1.10. Operational definition.....................................................................................................................6
CHAPTER TWO.........................................................................................................................................7
1. REVIEW OF RELATED LITERATURE...........................................................................................7
2.2. Concept and definition of Addis credit.............................................................................................7
2.3. Addis credit institutions VS Poverty.................................................................................................8
2.4. Financial Intermediation...................................................................................................................9
2.5. Challenge of Credit and Saving Institution in Ethiopia...................................................................11
2.6. Positive mood of ACSI...................................................................................................................11
 2.7. Entrepreneurs Related Factors........................................................................................................12
2.8. The Service of Addis credit service................................................................................................12
2.9. Group Guarantee System in Repayment of Loans.....................................................................13
2.10. Performance indicators.................................................................................................................13
2.11. Interest rate determination............................................................................................................13
2.12. Empirical Studies Regarding to Challenges of Microcredit service..............................................14
2.14. Conceptual Framework.................................................................................................................16
2.15. Research Gap................................................................................................................................17
CHAPTER THREE:..................................................................................................................................19
RESEARCH METHODOLOGY..............................................................................................................19
3.1. Research Design.............................................................................................................................19
3.2. Data Type and Source.....................................................................................................................19
3.3. Target Population and Sample Design............................................................................................20
3.3.1. Target Population........................................................................................................................20
3.3.2. Sampling Design and Procedures.................................................................................................20
3.3.2.1. Sampling Design........................................................................................................................20
3.3.2.2. Sample Size Determination.......................................................................................................20
3.3.2.3. Sampling Procedure..................................................................................................................21
3.4. Data Collection Instruments and Procedures.................................................................................21
3.4.1. Data Collection Instruments........................................................................................................21
3.4.2. Data Collection Procedures.........................................................................................................21
3.5. Data Processing and Analysis..........................................................................................................21
3.5.1. Data Processing...........................................................................................................................21
3.5.2. Data Analysis...............................................................................................................................21
3.6. Ethical considerations.....................................................................................................................21
3.7. Validity and Reliability....................................................................................................................22
CHAPTER FOUR;.........................................................................................................................................23
4. DATA ANALYSIS AND INTERPRETATION.................................................................................................23
4.1. Introduction....................................................................................................................................23
4.2. Demographic Characteristics of Respondents................................................................................23
4.3 Demographic Information of the Respondents...............................................................................23
4.4. Descriptive Statistics...........................................................................................................................26
 4.4.1. Level of access to credit by the ACSI’ of the entrepreneurs........................................................26
4. 4.2. To what extent has the income and saving of entrepreneurs has been changed after the credit
Utilization..............................................................................................................................................29
4.3. Criteria of ACSI to entrepreneurs to get credit...............................................................................32
4.4 To What extent employment opportunities are created by the entrepreneurs..............................36
CHAPTER FIVE:...........................................................................................................................................43
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS.............................................................................43
5.1. Summary.........................................................................................................................................43
5.2. Conclusions.....................................................................................................................................44
5.3. Recommendations..........................................................................................................................44
REFERENCE................................................................................................................................................46
APPENDIX..................................................................................................................................................47
LIST OF TABLE

Table -1: - before credit.................................................................................................................14

table 2:- after credit........................................................................................................................14

table 4. 1:- frequency of respondents 23

table 4. 2:- respondents age variables............................................................................................24

table 4. 3:- educational characteristic of respondents....................................................................24
table 4. 4 : - marital status of respondents.....................................................................................25
table 4. 5 :- status of religion respondents.....................................................................................26
table 4. 6: -the general summery of all questions..........................................................................41

table 4.2. 1 :- level of access to credit28

table 4.2. 2: - summarizing suggestion of respondents relative to after joining the credit............31
table 4.2. 3 criteria of acsi to entrepreneurs to get credit...............................................................34
table 4.2. 4:- total summarize of questions survey........................................................................38

IV
LIST OF FIGURE

Figure 4. 1:- Level of access to credit---------------------------------------------------------------------29

Figure 4. 2;-After joining credit---------------------------------------------------------------------------32
Figure 4. 3 :- Criteria of credit-----------------------------------------------------------------------------35
Figure 4. 4 : - Job creation opportunity.------------------------------------------------------------------40

V
 APPENDIX
Questionnaire 46

VI
LIST OF ACRONYMS

ACSI Addis Credit and Saving Institution

ADLI Agricultural Development Led Industrialization

MC Microcredit

MCIs Microcredit Institutions

MCP Microcredit Programs

MFIs Microfinance Institutions

MSEs Micro and Small Enterprises

ORDA organization for the Rehabilitation and Development of Addis Ababa

PRSP Poverty Reduction Strategy Program

UNDP United Nation Development Program

UN United Nations

ADA Amara Development Association

NGO Non-Government organization

AWA Amara women’s Association

MSSE Micro small scale enterprise

VII
ABSTRACT
The main purpose of the study was the role of saving and credit institutions towards meeting the
financial needs of entrepreneurs in case Addis credit and saving institution. Descriptive research
based on survey approach was carried out using primary data collected through self-developed
questionnaire. The descriptive result ascertained that inadequate source of criteria, lack of
accessibly, creation job opportunity and change income, inadequate clients’ information, clients’
utilization of loans to personal consumption rather than in investments activities, lack of clients’
efficiency and required skill to run their business, tough competition from the industry, clients’
requirements of innovative and diversified products and services, low saving size, inability to
provide products that could address the needs of clients and failure to consider its operations as a
significant means to generate revenue were the major challenges of ACSI. The study result also
indicated that, ACSI failed to succeed in supply of consistent and diversified financial services,
employment creation, provision of socio-economic benefits, operation based on character and
collateral free lending system, provision of loans at reasonable interest rate, increasing the
income and well-designed incentive system, in provision of appropriate and dependable financial
services, helping the overall existing business growth and frequent performance visits of
entrepreneurs. The study recommends that ACSI needs to curb the challenges and problems
related to clients’, criteria and accessibility so as to achieve it intended objectives and to exploit
and use the available opportunities in the industry.

Key words: Addis credit and saving institution, Micro and Small Enterprises,

VIII
CHAPTER ONE: INTRODUCTION

1.1. Background of the Organization

Addis Credit and Savings Institution (ACSI) is a micro finance institution operating primarily in Addis
Ababa. ACSI is a region-based micro finance institution established to serve people residing in the City
of Addis Ababa in January 27th 2000 and legally registered by the National Bank of Ethiopia, according
to Proclamation No.40/1996 (ACSI, 2014).Addis Credit and saving institution to provide financial
service for the poor households.
The terms microcredit and microfinance are often used interchangeably, but it is important to highlight
the difference between them because both terms are often confused. Sinha, (1998) states that microcredit
refers to small loans, whereas microfinance is appropriate where NGOs and MFIs supplement the loans
with other financial services such as savings and insurance. Therefore microcredit/ACSI is a component
of microfinance in that it involves the provision of credit to the poor, whereas microfinance adds on non-
credit financial services such as savings, insurance, pensions and payment services (Ferka, 2011).
Entrepreneurs are societies who are eligible and who can be organized to seek money from saving and
credit institution to achieve their common objectives
From saving and credit institution entrepreneurs should save first to get a credit but in micro finance the
customers should take the credit and then they can save. Addis Credit and saving institution was
established to give full support to micro and small scale business operators as per the revised
proclamation No. 626/2009, ACSI has an objective to collect deposits and extend credit to rural and
urban farmers, and people engaged in other similar activities as well as micro and small scale rural and
urban entrepreneurs (ACSI, 2014).
To achieve its objective, ACSI operates in Addis Ababa and Oromia region surrounding Addis Ababa;
Burayu and Sululta; in line with the government’s policy ACSI’s target focus is the low income,
productive poor with a special emphasis on women. ACSI currently delivers microfinance activities
including credit, saving, micro-insurance, local money transfer, fund management, financial leasing
services, and managerial, marketing, technical, and administrative advice. Currently the institution has 10
branch offices, 116 service delivery posts and opening & micro bank. Since its establishment the
company has been giving mainly credit, saving and develop different services like third party fund
management (ACSI, 2014).

1
ACSI's mission is to promote micro and small enterprises to alleviate poverty and unemployment
prevailing in Addis Ababa city administration territory through provision of sustainable financial and
other related service with particular attention to women (ACSI, 2014).

1.2. Background of the Study

In developing countries, the poor have little or no access to financial resources. Consequently, their
participation to the development of the economy of the nation is limited. In fact, the poor can actively
participate and bring about considerable change in economic and political activities if they are
economically empowered (Welday, 2004).
One of the identified constraints facing the poor while they struggle to move out of poverty is lack of
access to financial service from formal financial institutions, mostly access to credit and saving (Derbew,
2015). According to Derbew (2015) majority of the people from developing countries are poor and when
poor people have access to credit and other financial services, they can earn more, build their assets,
invest on their own future and cushion themselves against poverty.
Accordingly, microcredit institutions are considered as the main tool by developing countries to
overcome poverty through accessing financial service for the productive poor section of the society who
are affected by lack of access for credit and other related financial services (Derbew, 2015).
It is believed that the revolution of microcredit institutions changed the attitude of different governments
that poverty can be reduced through providing and assisting substantial flow of credit and other related
services to the poor in many countries. As a result, microfinance has been portrayed as a logical approach
through using policy and program intervention for poverty alleviation (Bateman, 2011).
With respect to poverty reduction, it is the core objective of the Ethiopian government and strives to
incorporate different poverty alleviating strategies within its development policies (MOFED, 2002).
Among those programs intervening with supplying credit for productive poor and giving them
opportunity to save; thereby ascertaining access to finance with microcredit institution is considered as
one of the important tools for curving poverty.
Following the Ethiopian government development policies and programs, ACSI was established in
accordance to proclamation No. 40/88 in 2000 based on the objective of provision of credit and saving
services to the active poor and contributing to the eradication of poverty and unemployment prevailing in
Addis Ababa and surrounding through providing demand driven financial services is a sustainable way
mainly for entrepreneurs with special focus to women.

2
17years have been elapsed since ACSI engaged in providing microcredit services to the asset less
potential productive poor section of the society across Addis Ababa region that had not had any access to
the services of formal financial institutions. ACSI is now a three tiered organization with head office in
Addis Ababa, 10 branches in each sub-cities of Addis Ababa and 16 micro-finance loan saving service
giving branches (ACSI, 2014). Addis credit and saving institution has been improving its policies from
time to time make it adjustable the external environment and make its services convenient to
entrepreneurs. And for those working with the institution, the government of Ethiopia established a legal
frame-work for the establishment and operation of fairness of accessibility including criteria of credit like
ACSI.
. However, a key feature of the developing country context is the presence of multiple market
imperfections; labor market failures is one well-studied (Deo-lalikar and Vijverberg (1983), Newell,
Pandya and Symons (1997) and Bharadwaj (2008)).Thus a relevant question in this setting is the extent
to access of the criteria credit affect entrepreneurs supply decisions hiden. This paper examines the role
of saving and credit institutions towards meeting the financial needs of entrepreneurs! The case of Addis
credit and saving institution In particular, the researcher focus on the Addis credit and saving access to
the entrepreneurs.

1.2 Statement of the problem

Saving and credit institution is one of the ways to improve the livelihood of poor people by giving credit
In Ethiopian context, saving and credit is focus on poverty and that are provide financial business
services to very poor person to job creation and income generation. Although, the delivery service of
saving and credit to giving financial accessibility for entrepreneur is numerous criteria. Know a day the
first criteria of corporate in to entrepreneurs size must from five individual of peoples and above, the next
to this, the rest criteria is that; - permitted hold title certificate, (tittle deed) car lubre, government
employee warranty, educational document (proclamation No.626/2009) For the purpose of these things
many young and women unemployment cannot beneficiaries . Hence they do not meet their need from
this institution. In addition to, ACSI is also one of the means that is aimed at increasing accessibility of
credit to the entrepreneur, Getaneh, (2005), in our country context the government policy and strategy is
to solve the problem of people who’s below poverty line and to reduction unemployment. The
government facilitate saving and credit institution for micro small scale enterprise to get credit to create
job opportunity run out from poverty line to our country growth to meet developed country and to attain
Ethiopian GDP. So according to the policy and strategy putted by the government provided the financial

3
from saving and credit institution, to the entrepreneur is satisfied. The credit provided to the poor has
brought appositive impact on the life entrepreneurs. Or MSEs, in terms of income, towards get accesses
credit for entrepreneur. Asmelash, (2003)

The notion is asserted by (Kepha, 2013) those entrepreneurs are generally regarded as the driving force of
job creation, and poverty reduction in developing countries

However, the study focused only on the officials criteria of loan of the entrepreneurs and neglected the
challenges of accessibility that have direct contact with entrepreneurs in the service provision process. In
addition, the study mainly focused on the challenges and neglected the achievements and the
opportunities of the loan. Therefore, this study will intend to fill the gap by identifying the major
challenges, the achievements and opportunities of MFIs in Ethiopia in provision of financial service to
entrepreneurs in context of the available literature with a particular reference to Addis Credit and Saving
Institution (ACSI).

1.3 Objective of the Study

1.3.1 General Objective

The general objective of the study is to examine the role of saving and credit institutions towards meeting
the financial needs for entrepreneurs in kolfe keranio sub city In case of woreda 08

1.3.2 Specific Objectives of the study

 To analyze the level of access to credit by the ACSI’ for the entrepreneurs.
 To examine the change in the income of entrepreneurs businesses
 To analyze the criteria of ACSI’ use to affect credit to the entrepreneurs
 To analyze the role of entrepreneurs’ in creating employment opportunity.

1.4 Research Questions.

Based on the research problem provided, the study will focus on addressing the following specific research
questions:

1. What is the level of access to credit by the ACSI’ for the entrepreneurs?
2. To what extent has the income and saving of entrepreneurs has been changed after the credit
Utilization?
3. What criteria are there for entrepreneurs to get credit?
4. To What extent employment opportunities are created by the entrepreneurs?

4
1.5 Scope of the Study
Addis credit institutions covers a wide area of issues and encompasses the contribution of MFIs in
eradication of urban poverty through providing demand driven financial services in a sustainable way and
with a special focus to women. However, the methodological focus area of this paper is limited to
identifying to assess the role Addis credit and service institution towards meeting financial unities and
criteria of ACSI in provision of financial services to entrepreneurs.
Addis Credit and Saving Institution providing services in its Head office; Operational Department Zones;
by opening branches; and Microcredit loan saving service giving branch outlet in all 10 sub-cities of
Addis Ababa. However, the study limits geographically its scope on branches and outlets in kolfe
keranioSub-city. Woreda08.

1.6. Scope of the Study.

This study will delimit in kolfe keranoi sub-city woreda 08 the direction of limitation at the east kolfe
keranio sub-city woreda 09, south kolfe keranio sub-city woreda 06 and 07 at the west oromia special
region Burayu town and North kolfe keraio sub-city woreda 10. Hence the study will focus on the
entrepreneurs that are not affordable ACSI criteria. It mainly focuses on most of the entrepreneurs whose
fulfill the criteria of giving credit. Therefore, it may not have a strong scientific justification and
representativeness to generalize about the Accessibility of ACSI For enterprises in the entire country.

1.7. Limitation of the study

 Lack of base line survey
 Lack of appropriately providing the accurate information.
 lack of written document more about criteria of giving credit to entrepreneur equal
opportunity
 .lack of Budget
 Lack of enough time

5
 1. 8. Significance of the Study
The study is beneficial to Addis Credit and Saving Institution in meeting its objective of giving financial
service to entrepreneurs by providing initial information about the challenges the institution is facing and
the accessibility and criteria have as a result of provision of financial services to entrepreneurs so that
appropriate actions taken accordingly. In addition, this study might also contribute to the existing
literature of Addis credit service institution

1.9. Organization of the study

This study has five chapters. Chapter one presents the overall introduction in which historical background
of the organization, brief introduction of the topic, research problem, research questions, objective of
study, and scope and limitations of the study. Chapter two discusses literature review in which previous
theories and empirical findings regarding Microfinance challenges and opportunities. Chapter three
explains the research design and methodology. Chapter four briefly discusses the results and findings of
the study. The final chapter presents the summary, conclusions and recommendations of the study based
on the findings.

1.10. Operational definition

Saving =from loan entrepreneurs (both compulsory and voluntary saving) as well as from the other
members of the public (voluntary saving)

Credit =side customer provided for income generation and related purpose

Loan=both lender and sacker provided for income generation and related purpose

Entrepreneurs =the person who create a job.

6
 CHAPTER TWO

1. REVIEW OF RELATED LITERATURE

2.1. Introduction

The reason for reviewing the existing literature is to know what is already known about our area of
interest so that we do not simply ‘reinvent the wheel’. We need a comprehensive review of literatures in
the areas of Microfinance and its challenges and prospects in provision of financial service to
entrepreneurs; identify the problem and research gap; and to come up with appropriate research methods.
Therefore, the following chapter deals with the literature relevant to the study by presenting the
theoretical literature, empirical literature and summarizes theoretical and empirical relationship and the
gap to be researched.

2.2. Concept and definition of Addis credit

In these terms microcredit and microfinance are often used interchangeably, but it is important to
highlight the difference between them because both terms are often confused. Lidgerwood (1999) states
“microcredit refers to small loans, whereas microfinance is appropriate where NGOs and MFIs
supplement the loans with other financial services (savings, insurance, etc.)”.Hence, From Saving and
credit institution entrepreneurs should save first to get a credit but in micro finance the customers should
take the credit and then they can save. Therefore microcredit is a component of microfinance in that it
involves providing credit to the poor, but microfinance also involves additional non-credit financial
services such as savings, insurance, pensions and payment services

The maximum credit period for entrepreneurs’ credit is two years and the majority of the credit is to
groups that exist in in the rural areas. The proportion of credit to urban areas is limited. The maximum of
interest rates that is charged on credit was lifted by the National Bank of Ethiopia some time ago, with no
formal restrictions in terms of interest rates ACSIs charge their entrepreneurs. This means that ACSI can
freely price its loans to cover administrative expenses, loan losses, and cost of funds, capitalization rate
and a profit margin. However, there appears to be pressure from the Government to keep interest rates
low. But for entrepreneurs interest rate is high to back payment.

7
2.3. Addis credit institutions VS Poverty
Poverty level can be classified in to absolute and relative poverty. The extent of absolute poverty can be
defined in the number of people living below a specified minimum level of income which is one US
dollar person in come per day. Wekwete (1999: 37) characterized poverty by among other things,
malnutrition, lack of education, low income and assets, environmental risks, low life expectancy, and
substandard housing.

Poverty is the major problem in most developing countries. In these countries economy, among
Others, absence of access to credit is presumed to be the cause for the failure of the poor to come out of
poverty. Meeting the gap between demand and supply of credit in the formal financial institutions
frontier has been challenging (Von Pischke, 1999).
In fact, the gap is not aroused merely because of shortage of loan-able fund to the poor rather it arises
because it is costly for the formal financial institutions to lend to the poor. Lending to the poor involves
high transaction cost and risks associated with information asymmetries and moral hazards. Only a small
fraction of the world population has access to financial instruments, essentially because commercial
banks consider the poor people as unbankable due to their lack of collateral and information asymmetries
(Letenah Ejigu 2009).
Most formal financial institutions do not serve the poor because of perceived high risks, high costs
involved in small transactions, low relative profitability, and inability of the poor to provide the physical
collateral required by such institutions. The business culture of these institutions is also not geared to
serve poor and low-income households.
Lacking access to institutional sources of finance, most poor and low-income households continue to rely
on insufficient self-finance or informal sources of finance. However, these sources limit their ability to
actively participate in and benefit from the development process.
Thus, a segment of the poor population that has viable investment opportunities persists in poverty for
lack of access to credit at reasonable costs. The poor also lack access to institutional credit for
consumption smoothening and to other services such as payments, money transfers, and insurance (ADB,
2000).
For the purpose of conducting this research, the researcher defines the terms and concepts in the
following way:
Addis credit and saving institution is the provision of financial services to low income poor and very
poor self-employed people (Otero, 1999). These financial services, according to Lidgerwood (1999),
8
generally include savings and credit but can also include other financial services such as insurance and
payment services.
Understanding the role of financial intermediation in entrepreneur’s decisions is important for identifying
the underlying determinants of economic growth and for designing effective policy in the developing
world. Important theoretical work by Eswaran and Kotwal (1986) highlights the role that access to
working capital plays in responsible which households become entrepreneurs, as well as the composition
of labor that entrepreneurs employ. Yet empirical work explaining the relationship between credit access
and entrepreneurial decisions is only now emerging (Paul-son and Townsend (2004), McKenzie and
Woodru_ (2006), Karlan and Zinman (2010)). For example, recent evidence from a randomized
evaluation in India has shown that expanding access to credit can have significant effects on
entrepreneurship (Banerjee, Duo, Glennesterand Kinan (2010)) it deals with concepts of imperfections
Access to credit of entrepreneurs affordable criteria ACSI fulfilling. Related empirical findings present
the criteria that challenge entrepreneurs for getting credit service and its relationship with ACSI access to
credit compliance. Nevertheless, in several developing countries governments have intervened, through
Introduction of microfinance institutions to minimize the gap, and then allow the poor access credits .
There is recent global agreement that microcredit institutions are good instruments to fill the gap of
conventional banks’ limitations in reaching the poor and the vulnerable non-poor with banking services.
They are considered as one of the most effective interventions for empowering the poor in their economic
and social involvements. That is, through these MFIs, the poor are able to access financial services,
which previously were exclusively available to the upper income population. The basic idea behind such
intervention is that access to microfinance services such as credit, savings and micro-insurance to the
poor could help them, among others, to expand their businesses that will allow them to pull out of
poverty (Mekonnen, 2008).

2.4. Financial Intermediation

Financial Intermediation involves transferring capital, liquidity or risk from those parts of the economy
that have a surplus, to those that have a shortage (Siddharth & Nichola, 2003). This is the main service
offering of MFIs. It can include providing working capital, fixed asset loans, savings and insurance
products.

MFIs are often not in a position to provide a full suite of financial services. The products they do offer
depend on their objectives, and the needs of their target market. In principle, they are very similar to
those offered by large financial institutions, but usually with an emphasis on simplicity (Siddharth &
9
Nichola, 2003). The financial services offered by MFIs generally include savings and credit but can also
include other financial services such as insurance and advisory services. Siddharth & Nichola (2003)
examined the financial services provided by MFIs, as follows:

Credit: Loans are usually provided for investment in a productive pursuit (as opposed to being used for
consumption). There are times (e.g. during a drought that causes a lack of production), where the loans
may be provided for consumption as well, although if used too widely, it may result in a high rate of
default. Credit is usually provided on a short-term basis (anywhere between 3 months and one year),
generally for small loan sizes. Assessing credit risk is difficult, and not cost effective for small loan sizes.
The method used by most MFIs is to lend small amounts to individual customers at first. If they make
timely repayments, they will increase the amounts they lend in the future. Some MFIs try to ensure
repayment by forming Joint Liability Groups. These involve members of a community agreeing to
guarantee each other’s loans. This way, peer pressure and community conscience can result in a high rate
of repayment on loans. Loan interest rates are usually higher than commercial banks, due to the higher
default risk and higher expense ratios faced.

Savings: Deposit taking services can be very valuable to the poor, who often have very few reliable
places to save money in order to smooth timing differences between their income and expenditure. From
the MFI’s point of view, it can be a useful source of funds, and can encourage financial prudence in their
clients. The risks in providing these services are similar to those faced by any bank. If the MFI’s loan
repayment rate in particular is poor, there is a great risk that depositor’s capital will be eroded. Generally,
deposit taking institutions would be required to face much more regulation than those providing just loan
services. It can be disastrous for confidence in the financial system if the poor lose their savings due to
insolvency of the MFI.

Insurance: MFIs in some countries are trying to expand their product range to include risk transfer
services. The Grameen Bank in Bangladesh for example requires each member in a group lending
programme to contribute 1 percent of the loan amount to an insurance fund to cover the risk of death
mitigating their ability to repay the loan. Other types of insurance offered include health and property.

This is a risky product to offer for many MFIs, as they often lack the expertise to price or control the risk
they take on- did somebody call for an actuary? It is also questionable whether insurance is of as much
value to the very poor, as the cost to transfer the risk may be too high for them. Some institutions that
have provided insurance say that clients get benefits from protection against extreme hardship caused by
10
death or catastrophe. Such disasters often hurt the poor more than the rich and from insurances service
any cannot to serve entrepreneurs when the entrepreneurs gat in crises rather than collect it from
entrepreneurs as their benefits systematic method. Look, the entrepreneurs’ whose gating in shutdown
his/her business cannot compensate from insurance. This is fact visible in ACSI.

2.5. Challenge of Credit and Saving Institution in Ethiopia

In order to address the problem there have been a growing number of microfinance impact studies being
conducted by academic institutions, microfinance associations, and researchers. However, some of the
studies to which the researcher had access to have been reviewed here.
Getaneh (2005) Addis Ababa Credit and Saving Institution, before and after the program analysis of
impact on entrepreneurs, ACSI has brought very little impact in poverty reduction and enterprise
development. The outreach performance is also minimal. The poor marketing situation, lack of
Accessibility and lack of equal distribute credit to the entrepreneurs have negatively affected the
performance of ACSI and also conducted by (Padma and Getachew (2005)) on entrepreneurs of Omo and
Sidama MCIs in Awassa town of SNNPRS shows that some clients were able to send their children to
private schools and build assets. However, lack of fairness of criteria giving credit entrepreneurs credit
and payback in business and marketing were indicated as major obstacles.
According to (Meron.2007), 373 entrepreneurs questioner survey in Addis Ababa in Specialized
Financial and Promotional Institution (SFPI), were asked their level of income before and after they
joined ACSI, the purposes for which they use the loans, the level of savings in comparison to the times
before joining ACSI and their decision making powers on the loan secured and the impact can occur at
entrepreneurs, individual, household and even community level, much of which being a result of
entrepreneurs profitability. Similarly, though credit is generally expected to have a positive impact on
household livelihoods, a study conducted in North Gonder, Ebinat district argued that credit affects
entrepreneur’s differently depending on wealth. Results show that credit failed to enable poor
entrepreneurs’ to move out of poverty and food insecurity, whereas better-off and labor rich
entrepreneurs’ used credit to improve their livelihoods and Getachew (2005) AS reported positive
impacts of ACSI.

2.6. Positive mood of ACSI

In Addis Ababa city administration, practice strongly suggests that microcredit indeed has a potential to
be one of the key instruments to fight poverty in its every aspect by positively affecting the house-hold
economic portfolio. For the poor, it can expand opportunities for enhancing income, improve capabilities
11
in terms of human capital, improve the copping mechanism against vulnerability in its various features,
as well as empower the disadvantaged. Yet, the available evidence suggests little progress in this regard
(Getaneh, 2004).but not categorized the entrepreneurs’ level, rather than justify as a general.

2.7. Entrepreneurs Related Factors

Some Entrepreneurs take time to come up with income generating activities to be financed by credit. As a
result of emphasis on savings in the initial training, they focus primarily on savings and providential
small-scale productive uses of their savings (Graham, 2000). Hence, lack of ability to select the economic
activity that generates income matching with the credit repayment plan causes credit default with respect
to the credit can get from ACSI .the credit what they get from ACSI sometimes not strong enough
income generation even though not for back pay .
Besides, the financial status of the family also pause a threat to credit repayment. In some instance lack
of cooperation from family members, practice of polygamy, conflict with the spouse all drain a family’s
resources. Entrepreneur’s misallocation of funds into consumption activities rather than on credit
instruments themselves also leads to poor repayments. Hence, credit is a necessary but not sufficient
condition in helping the poor lift themselves out of poverty.

2.8. The Service of Addis credit service

The regulatory framework for Addis credit service institutions permits encouraging options for the access
to operate and expand their services in both rural and urban areas of the country.
As one of the positive aspects, the regulatory framework allows licensed MFIs to accept deposits from
the public and be able to finance a significant portion of their lending businesses. ACSI has been
considered as one of the best entry points for bringing sustainable development. It is one of the most
prominent instruments of most government’s pro-poor development programs and strategies (Mekonnen,
2008)
Access to financial services at all level of the economy makes substantial growth and development, and
this is more consequential for poor (Herath and Ahmad, 2007).
As Bamlaku (2006) indicated in his study, in developing counties the poor section of the society were
simply kept out of the reach of the formal financial institutions for several reasons.
· Formal financial sectors require collateral and credit rationing.
· The processes and procedures of providing loan are bureaucratic and lengthy.
· Formal lenders are often urban based and give lending to those engaged in trade and industry.
· Formal lenders usually consider the demand for loan by the poor as unattractive and Un profitable.
12
 2.9. Group Guarantee System in Repayment of Loans
Group Guarantee System ensures that groups must “self-select”. Government in 2017to minimizes the
number of literate unemployed for the matters of collateral groups are formed by members of the
community themselves but ACSI are with group guarantee because of back payment. Group Guarantee are
drawn from trusted friends and neighbors and are more willing to help each other out during the inevitable
times of stress (Micro-banking bulletin, 1998). This system is used to do away with the need to demand
physical collateral and thus both village banks and cooperatives savings and credit schemes are formed on
this premise. Membership rules may seem too strict but experience has shown that this is necessary for the
group’s success. Some individuals may fail to meet these standards. And who enforces these rules?
It is noted that the group acts as a self-policing mechanism to ensure on time repayment (Bernett and
Goldberg, 1993). Hence self-selection of group members appears to be critical to the success of groups
for borrowing and saving purposes. The concept of joint liability depends on members’ sense of trust and
collective responsibility. Typically, these groups are formed around shared characteristics and needs such
as economic interests, shared production and marketing needs, common residential or production location
or shared ethnic background (Naqvi, 1992).
When the loan is given to the group as a whole, mandatory joint liability prevails (Karla, et al., 1993).

2.10. Performance indicators

An analysis of the financial statements shows that ACSI has a healthy financial position, with significant
increases in profitability recorded since its last recorded loss in 2001. For 2004, unaudited accounts show
a net profit of US$3.7 million (excluding grant income), and retained earnings of US$6 million. The key
measure of operating efficiency, the operating expense ratio22, already at incredibly low levels, reduced
even further in 2004, reaching 6.2 percent, which is amongst the lowest in the world, here we consider
one big things, that are ;the visibility of financial profitability is focus on ACSI.ACSI is not consider
income assess of entrepreneurs,

Generally the ACSI vision is not only for the matter of collecting revenue it is about improving the
income of entrepreneurs.

2.11. Interest rate determination

Limited marketing facilities in which clients may not get the fair price for goods used by the clients also
affect repayments (Marguerite, 2001; Stieglitz and Weiss, 1998). However, all this stems from the fact
that in actual markets, lenders never have perfect information about the characteristics of their borrowers

13
and can never perfectly monitor their actions Determination of lending interest rate is essential to
ADCSI, when they borrow money to their members. Entrepreneur’s only know interest rate is 10%befor
joining ACSI .the rest like service charge 2% and insurance 1% which is depends on the national Bank of
Ethiopia Microfinance Declaration after joining ADCSI . Morris and Barnes (2005) provided an
overall assessment of the impact of ACSI programs in Uganda. The researcher did not find that
Micro credit programs help to alleviate poverty in program areas, though results from this study
another is indicated negative impacts after credit back payment in terms of interest rate. Without giving
breathing time interest and compulsory back payment have impact on entrepreneurs
Table -1: - before credit

No Amount of credit First deposit before credit (20%) Total

1 30,000 6000 6000
Source; - ACSI brochure

Table 2:- after credit

No Amount of Interest Service Insurace1% Total

credit rate10% charge2%
1 30,000 3000 600 300 3900 per month back
payment

Source; - ACSI brochure

2.12. Empirical Studies Regarding to Challenges of Microcredit service

D. Muhammad (2010) highlighted improper regulations, increasing competition, innovative and
diversified products, stability, and limited management capacity of MCIs as the major challenges of
MCIs in Pakistan. Jaffari et.al (2011) highlighted that availability of other cheaper financial resources,
limited physical presence of MCIs, inability of MCIs about risks and standard practices, incompatibility
of microfinance products with conventional banking, unavailability of quality human resource in
comparison to other financial institutions and poor level of staff training, utilization of loan for personal
consumption were the major challenges of MFIs in Pakistan. Akuamoah & Agyei (2013) revealed that
lack of adequate client information, higher information technology cost, lack of vehicle for
transportation, higher utility cost, higher salaries, unwillingness of clients to provide personal
information and lack of solid credit risk management policy were major challenges of microfinance in
Ghana.

14
Deribew (2015) conducted a study on the challenges facing officials of Microcredit with respect to
Ethiopia. The researchers seek to highlight the key challenges facing officials of microfinance
institutions, case of Amhara Credit and Saving institution, Ethiopia. The finding of the study showed that
officials of the institutions facing several challenge emanated from system of the organization and from
the side of clients. Therefore, the institution itself should give emphasis to avoid the challenges facing
officials. Mohammad (2015) tried to introduce practical evidence about challenges facing microfinance
institutions in poverty eradication and to examine what role microfinance institutions can play in
eradication of poverty in Mogadishu. The study showed that misconception about microfinance
institutions due to their newly inception, inadequate loans, less mentionable support from government
and donor funding hinder the microfinance institutions. The researcher suggested that government needs
to give consideration to the micro finance, allocate a substantial budget and donate to these microfinance
institutions in order to boost the living standard of people and ultimately contribute towards the economic
development and prosperity of the country. Kifle (2015) tried to identify factors such as, absence of
financial cooperatives policy and regulatory environment, weak institutional capacity, narrow product
range and inappropriate loan security requirements are challenges of saving and credit cooperatives in
Ethiopia.

Alemayehu & Fenet (2016) identified various challenges that constrain MFIs from efficient operations in
Ethiopia. The fact that the MFIs are dealing with clients with low-income base would mean that the
outreach objective could not be achieved at the desired speed without compromising self-sustainability.
MFIs may desire to set a high lending rate to cover their high operating cost so that they would be able to
earn a certain level of profit margin. But given their client are poor, and the activities they carry out may
not be profitable at a lending rate high enough to generate profit to the MFIs, the need to set a high
lending rate would be diluted.

15
2.14. Conceptual Framework
In this study the dependent variable is the provision of financial service of MFIs to entrepreneurs while
the independent variables are employees’ perception about the contributing factors for the access, income
change, job creation opportunity and criteria of ACSI. The factors were selected after careful review of
several articles and adapting the work of As Bamlaku (2006) work indicated in his study, in developing
counties the poor section of the society were simply kept out of the reach of the formal financial
institutions for several reasons.

16
 2.14.1. Independent Variables Dependent Variable

Accessibility of credit service Change income

Provision of
 Provision of services
-sustainable income Financial Service to
within the needs and
entrepreneurs
situations of entrepreneurs -change life existence
- Credit
 Businesses operate based Change business
- Saving
on a character-based gradually
lending -Insurance

 Equal distribute of credit

officers to entrepreneurs at
time
Criteria and collateral of credit Job creation
 -care lubre opportunity Medting Variabl

 -House tittle deed -employee capacity

 Government workers
guarantee Government Regulations

 -compulsory first deposited National Bank

six months Requirements

Conceptual Framework
Source: Own Compilation

2.15. Research Gap

In line with the above theoretical as well as empirical review there is no standard study on the challenges
and opportunities of entrepreneurs in provision of financial service to entrepreneurs .It has been seen that
in the previous studies the challenges and opportunities of MFIs varies across countries and most of the
studies focused on the challenges of MSEs particularly to Women entrepreneurs.
In addition, there is no study that indicates the role Addis credit service institution to ward meeting
financial needs of entrepreneurs is in our country particularly in Addis Credit and Saving Institution as if

17
it is well known in the past years in providing financial services to entrepreneurs with a particular
emphasis to entrepreneurs.
Therefore, this research will contribute towards filling the gap by identifying the major accessibility of
credit in provision of financial service to entrepreneurs in Ethiopia particularly in the case of Addis
Credit and Saving Institution in context of the available literature in the area.

18
CHAPTER THREE:

RESEARCH METHODOLOGY

3.1. Research Design

A research design according to Zikmund, Babin, Carr & Griffin (2009) is a master plan that specifies the
methods and procedures for collecting and analyzing the needed information. A research design provides
a framework or plan of action for the research. It is useful to determine which research approach is being
implemented when conducting a research. Research design provides a framework for undertaking the
research (Bryman, 2012). In order to answer the research questions, the research must address suitable
methodologies for data collection and data analysis.
Descriptive research designs help to provide answers to the questions of who, what, when, where, and
how associated with a particular research problem (Bryman, 2012). Descriptive research is used to obtain
information concerning the current status of the phenomena and to describe "what exists" with respect to
variables or conditions in a situation (Zikmund et al. 2009). Therefore, the study employed a descriptive
survey design that describes achievements, challenges of accessibility of Addis Credit and Saving
Institution in provision of financial services to entrepreneurs.

3.2. Data Type and Source

Based on the objectives of the study, the study uses both qualitative and quantitative type of data. The
study used qualitative data to provide insight about problem of the study. In addition, to objectively
measure and evaluate the perceptions of entrepreneurs about the challenges of accessibility of Addis
Credit and Saving Institution the study used qualitative and quantitative data.
The study used both primary and secondary data sources. Entrepreneurs are the main sources for the
primary data. In addition, company website and previous literatures in the area of microcredit are the
secondary sources of data

19
3.3. Target Population and Sample Design

3.3.1. Target Population

Target population for the study are all new entrepreneurs of Addis Credit and Saving Institution in kolfe
keranio sub-city woreda 08 who are actively seek to involved in financial service and related activities.
According to the data obtained from Addis Credit and Saving Institution kolfe keranio sub-city woreda
08 Branch with permission from HRM and Admin deputy managing director office, a total of 1400
entrepreneurs fall in this category.

3.3.2. Sampling Design and Procedures

3.3.2.1. Sampling Design

Because of time and budget constraint the study used survey sampling design on entrepreneurs of ACSI
in kolfe keranio sub-city woreda 08. Thus, to achieve the study purpose, a purposive sampling method
was chosen to select a representative sample from the target population

3.3.2.2. Sample Size Determination

For the purpose of the study the sample size as suggested formula by Yamane (1967: 886): To determine
the sample size, the Solving’s formula of sampling technique was used. This formula was used to
calculate the sample sizes, a 95% confidence level and p=0.5 are assumed. n= N/1+N (e) 2 Where n is the
sample size, N is the population size, and E is the level of precision. Based on this, the researcher
considered half of the sample size due to time, finance and other related problems specifically; the
sample included 1400 Individual’s entrepreneurs to participating ACSI.

n=N/1+N (e) 2 N = number of sample (sample size)

N = population size

E =natural log

n=1400/1400(0.0025)2 =311.11

Based on this, the researcher considered sample size in the view of the researcher was considered fairly
adequate and representative. Specifically, the sample included 311 entrepreneurs whose on the way to
participating in ACSI.

20
3.3.2.3. Sampling Procedure
To ensure each element in the population have an equal chance of being included in the sample, the task
of selecting sample size for data collection was done using a purposive sampling technique System.

3.4. Data Collection Instruments and Procedures

3.4.1. Data Collection Instruments

The data collection instrument this study used mainly is questionnaire. The questionnaire seek and cover
aspect the potential access, criteria, income change and job creation of the institution in relation to
providing financial service to entrepreneurs using both open ended and closed ended questions.

3.4.2. Data Collection Procedures

The questionnaire is prepared in both amharic and English language and classified into three sections as
the respondents understand. The first part of the questionnaire is designed to collect participant’s profile.
The second part is designed to request participant’s view in relation to the access, criteria, and income
change and job creation of ACSI in provision of financial service to entrepreneurs based on both open
and close ended questions. The third part, asks participant’s comments. The researcher used a five point
Like scale model to develop the questions. A rating 5 indicates 1) strong agreement, 2) agreement, 3)
semi agreement 4) disagreement and 5strong disagreement

3.5. Data Processing and Analysis

3.5.1. Data Processing

In the process of data analysis, the collected both qualitative and quantitative data values are processing

3.5.2. Data Analysis

The study mainly employed both qualitative and quantitative data analysis method. The quantitative
analysis of the study employed by numerical numbers the descriptive analysis employed measures of
central tendency (percentages, frequencies, Figure and variable) are used and the results are presented in
tables.

3.6. Ethical considerations

The research give due consideration to obtain consent from each participant of the study and it was
conducted strictly on voluntary basis. In addition, the researcher assured that the findings of the research
presented without any deviation from the outcome. Finally, the researcher gave full acknowledgements to
all the reference materials used for the study using APA referencing.

21
3.7. Validity and Reliability
To determine the probable usefulness of the questionnaire and whether further revision is needed prior to
data collection for the study using questioners for data collection, the survey instrument was tested with
selected academicians to check for possible problems with statement clarity and respondent
understanding as well as ability to complete the survey instrument. The subjects were asked about
specific comments regarding the questionnaire through both open-ended and close-ended questions.
To ensure the reliability of measurement instrument the researcher performed first standardize the
instrument and then, distributed the same to all respondents and was not changed from one person or
situation to another

22
CHAPTER FOUR;

4. DATA ANALYSIS AND INTERPRETATION

4.1. Introduction
The main objective of the study is to identify the major achievements, challenges and prospects of Addis
Credit and Saving Institution in provision of financial services to entrepreneurs. There were
311questionnaires distributed to selected participants in ACSI, 301 questionnaires were returned, which
indicated the overall response rate of 96.78 %.

4.2. Demographic Characteristics of Respondents

Demographic characteristic of the respondents was based on gender, level of education, ages status,
marital status and religion status of entrepreneurs.

4.3 Demographic Information of the Respondents

As per demographic characteristics of the respondents of entrepreneurs, Table 1 shows that 31.51% of the
respondents were female where as 68.49% were male. The respondents were that testify the fact that
most of the impacts of ACSI criteria of giving loan to entrepreneurs. Because the researcher was selected
the respondents purpose fully without any bias towards beneficiaries of entrepreneurs. There are good
reasons to target entrepreneurs by ACSI, because the criteria discrimination was one of the major causes
of accessibility to getting credit from ACSI and the entrepreneurs more disadvantaged.
Table 4. 1:- frequency of respondents

Variables Measurements frequency Percentage

Respondents Male 213 68.48%
Female 98 31.51%
Source; survey 2018
With respect to age, 76.52% of the respondents were in the age range of 25 to 30 years. 10.61% were in
the age range of 18 to 24 years and the remaining 12.86% fell between 31to 35years. This reveals that
members of entrepreneurs were from all age group without any discrimination which shows indistinctive
nature of cooperative. However, most of the respondents in the district were predominately in the
productive age group. The middle age in the society is the economically active population who has the
potential to engage in irrelevant work and other business activities.

23
Table 4. 2:- Respondents age variables

Variables Measuring Group Frequency Percentage (%)

18-24 33 10.61%
Age of Respondents 25-30 238 76.52%
31-35 40 12.86%
Source; field survey2018
The respondents also classified in terms of their level of education since, it could affect the way in which
they manage their daily lives and manage the household and business. From this survey, the majority
(28.93%) of the respondents are TVET. Next to these group, 22.50% had more than 9 years of education
experience (grade 9 to10), 20.90% had higher education experience (BA/BSC levels). However, 14.79%
of the respondents had preparatory education level and primary education (1-8 grades) is that 8.03%. The
rest 4.82% are illiterate. From this finding, it can be said that most of the respondents in thekolfe keranio
sub-city woreeda 08 districts had high level of education. Education is crucial for economic, social,
political, cultural, human and other aspects of development. This implies that more is expected to work
on education of respondents, especially entrepreneurs who’s in order to make corporate by their interest
to create job by themselves to getting credit from ACSI and to ensure jobs sustainability.
Table 4. 3:- Educational characteristic of respondents

Frequency
Variables Measuring Group Percentage (%)
Male Female
Illiterate 18 3 6.75%
1-8 grade 19 5 7.71%
9-10 grade 35 11 14.79%
Educational
11-12 grade 42 20 19.93%
Level
TVET 50 40 28.93
University/BA/BSC 49 19 21.86%

Source;- field trip 2018

24
Table 4. 4 : - Marital Status of Respondents

Measuring Group Frequency Percentage (%)

Variables
Sex related Married unmarried Married% unmarried%
Male 23 190 10.79% 89.20%
Marital status
Female 33 65 33.67% 66.32%

Source;-survey 2018

The information on the marital status and family size of the respondents was also collected
Through field trips questionnaires because of the marital status has Implications to the income,
expenditures and repayment of loan. The response of seek borrowers on their marital status is shown in
table .4 above. The research reveals that, the majority 190 (89.20.8%) of respondent male are unmarried,
and also 65 (66.32%) of female
Respondents are unmarried, as well as, married of the respondents are 23 (10.79%) of male and
33(33.67) were married. While 0(0%) of them is divorced.
This evidence proves that ACSI gives loan to more married clients than unmarried and any
Other marital status group clients. According to the staff of ACSI in KKSC, the reason for
Participation of more unmarried clients than other marital group clients in the credit program
is due to the fact that the demand for basic necessities by unemployment’s
With this reasons the ACSI in Kolfe keranio Sub-City woreda 08 is providing its microcredit to more
give attention unmarried clients equal opportunity towards cooperate as entrepreneurs Items of religion is
the credit service.

25
Table 4. 5 :- status of religion respondents

Variables Measuring Group Frequency Percentage (%)

Religion Orthodx % Muslim % Catholic % Protest %

s s ants
170 54.6% 5 1.60% 9 2.89% 127 40.83%
Source;-field surveying 2018
The information on the religion status respondents was also collected
Through field trips questionnaires because of religion status has Implications to the credit serves like
Muslim. The Muslim region and Christian region could not all interest rate credit. But due to
Huge problem most Christian and Muslim was used. The response of seek borrowers on their religion
status is shown in table .5 above. The research reveals that, the majority Christian 170 (54.66%) of
respondent, Muslim 5(1.6%)) also catholic 9(2.89%)) and the more amount respondents used that are 127
(40.83%) protestants. though Targeting the poor Microcredit institutions in Ethiopia targeted in principle
the low income segment of the community. The urban credit program by Addis Credit and Saving
Institution is mainly launched to address the problem of the urban poor through providing certain credit
access In order to enabling they involve in different socio-economic activities to improve their living
standards.

4.4. Descriptive Statistics

This section of the paper presents the descriptive analysis results of the Access, criteria, change income,
job creation and prospects of Addis credit and saving institution in provision of financial services to
entrepreneurs.

4.4.1. Level of access to credit by the ACSI’ of the entrepreneurs

4.4.1.1. Supply appropriate financial services

The study was conducted to assess for access of ACSI in provision of financial service to entrepreneurs
question is duplicated for the entrepreneur is answered disagree 37(11.9%) strongly disagree 249(80.1%)
semi-agree 25(8%). The respondents’ suggested that, the access of credit is not equal opportunity to
entrepreneurs, in terms of different things. Because absolutely poor and relatively have different
prediction in ACSI office, due to payback of credit.so here more advantageous are whose relatively poor.
For this matter there is on equal distribution of credit access form ACSI. Table 6 shows the frequency
26
and percentage responses of the study participants for the access of ACSI is achieving in provision of
financial service to entrepreneurs and their frequency value

4.4.1.2. ACSI services are equal accessibility for all entrepreneurs

To attain the establishment sufficiently according to the frequency scale respondent strongly disagree
127(40.83%) disagree 89(28.62%) semi-agree 53 (17.04%) agree 9 (2.9%) strongly agree 33 (10.61%)
respectively .according to the respondents suggestion is that the accessibility of ACSI is not decentralized
entrepreneurs. Hence the respondent suggestion fail down around strongly disagree 127(40.83%).from
this point of view the respondents are strong disagree.

4.4.1.3. Provide diversified financial service to the entrepreneurs

To attain the establishment sufficiently according to the frequency scale respondent strongly disagree
56(18%) disagree 186(59.8%) semi-agree 39(13%) strongly agree 30 (9.2%)

The credit which ACSI give to entrepreneurs is not match enough to business running. The ACSI give
credit is that the amount of you need to be depending on the collateral of entrepreneurs .due to that what
the entrepreneurs offered credit is not satisfy. This real what they observe from the environment
enterprises. More than half of respondents are dis agree with this topic

4.4.1.4. ACSI has provide dependable financial service to the entrepreneurs

The frequency scale is adequate to fulfill their need as the respondents given strongly disagree
213(68.5%) disagree 68(21.86%) semi- agree 16 (5.14%) agree 14(4.5%).The entrepreneurs after join
ACSI they became poor and poor too because of high amount of interest rate back payment

4.4.1.5. ACSI criteria promote equal accessibility for all entrepreneurs.

The frequency scale strongly disagree 109 (35.04%) disagree 160(51.44%) semi-agree 18(5.8%) strongly
agree 15(4.82%) agree 9(2.9%) the criteria has a problem by itself select unemployment’, so that, the
entrepreneurs who have some initial point of money satisfy, rather than who haven’t any things from his
hands.so the criteria is isolate new comer entrepreneurs.

27
Table 4.2. 1 :- Level of access to credit

Frequency
Variable Strongly Semi- Strongly Percentage
Agree Dis-Agree
Agree Agree Dis Agree
Supply appropriate
- - 25(8) 37(11.9) 249(80.1) 20%
financial services
ACSI services are
equal accessibility for 9(2.9) 33(10.61) 53(17.04) 89(28.62) 127(40.83) 20%
all entrepreneurs
Provide diversified
financial service to - 30(9.2) 39(13) 186(59) 56(18) 20%
the entrepreneurs
ACSI has provide
14(4.65) - 16(5.14) 68(21.86) 213(68.5) 20%
dependable financial
ACSI criteria
promote equal 9(2.9) 15(4.82) 18(5.8) 160(51.44) 109(35.04) 20%
accessibility
Total summation 11(3%) 16(5%) 30(9%) 108(34%) 154(49%)
100%
Source; - field survey 2018

Table 4.4.1.1 Level of access to credit

Measurement Frequenc
Variable Frequency
s y
Level of N N N
% % % No % No %
access to o o o
credit by
the ACSI’ In Numbers 100%
3.8 5 9.2 10 34. 15 48
of the 12 11 30
% % % 8 % 0 %
entrepreneu
r
Source; field survey 2018

28
Totally the above table shows that there is no strong inter relationships between ACSI and MSSE office
by regulation. That’s why, the rules of working both office are different, there is no which tide with each
other regulation .For this matter absolute entrepreneurs are not offered by this accesses then more than
half respondents are strongly dis agree so that more entrepreneurs accessed credit by ACSI.

Figure 4. 1:- Level of access to credit

90%
80%
70%
60%
50%
40%
agree
30%
strongly agree
20% semi agree
10% disagree
0% strongly disagree
ice ilit
y
vic
e
ab
le ria
erv sib er d iate
ls es ls en cr
n cia acc ncia dep ote
a l a l
fin ua fin cia om
te eq
ed an pr
ria rs
ifi fin
r op v e
ap
p di
.

The above figure shows that the ACSI access is not equal distribute at all. Especially for the new
entrepreneurs. And also the entrepreneurs haven’t get enough credit as their business plan the
work .because of there is no common share responsibility for entrepreneurs to ward MSSE and ACSI.

4. 4.2. To what extent has the income and saving of entrepreneurs has been changed
after the credit Utilization
4.4.2.1. Provide diversified financial services to the entrepreneurs

The frequency percentage scale as the question distribute and data collection is the credit given is not
enough for income business running and job creation strongly disagree 201(64.63%) disagree 97
(31.19%) semi-agree 13 (4.18%)here the ACSI access was not strongly satisfy because of the
entrepreneurs business needs and the ACSI give to them are not equivalent. Majority frequency fail
between dis agree and strongly dis agree, that means between31.19% to 64.63%. For this matter the
entrepreneurs could be become vulnerable to payback interest with its domain .for this fact things high
amount of respondents are strongly dis agree.
29
4.4.2.2. After you joining the ACSI Provide dependable financial services from the previous.
The frequency percentage scale strongly agree 6 (1.92%) agree 1(0.32%) semi-agree 5 (1.6%) disagree
146 (46.97%) strongly disagree 153 (49.19%). Hence, the majority of the participants gave ‘highly
unsatisfactory’ response on the overall supply of consistent financial services to entrepreneurs in ACSI.
4.4.2.3. After joining the credit service the entrepreneurs create job opportunities to
unemployment

The frequency percentage scale of strongly disagree 109 (35.04%) disagree 100(32.15%) semi-agree 60
(19.29%) agree 7 (2.27%) strongly agree 35 (11.25%)

Hence, considerable number of the participants gave ‘strongly dis agree response on the overall provision
of undependable financial services to entrepreneurs in ACSI In other words, the frequency percentage
scale of dis agree and strongly dis agree are totally occupied between 32.15% and 35.04% from total
frequency. Hence, the majority of the participants gave ‘strongly dis agree’ response on the overall
employment creation of ACSI to entrepreneurs.

4.4.2.4. MSSE and ACSI have inter relationships due to giving credit service to entrepreneur

The frequency percentage scale strongly disagree 143 (45.98%) dis agree 134 (43.1%) semi-agree 30
(9.64%) agree 1 (0.32%) strongly disagree 3 (0.96%)

The frequency of value item is 45.98% on measurement scale which is greater than the frequency of dis-
agree which also represent ‘highly dissatisfy response on frequent inter relationship between MSSE and
ACSI performance. The result also indicates the respondents perceive that both MSSE and ACSI are
unsuccessful in frequent performance invisible. They are vise verse.

4.4.2.5. An ACSI monitoring and evaluate the entrepreneurs to change their income effectively

The frequency percentage scale of response strongly agree 11 (3.55%) agree 7 (2.25%) semi- agree 11
(3.53%) disagree 139 (44.69%) strongly disagree 143 (45.98%) on provision of dependable financial
services to MSEs is 30.6% and 18.1% respectively. In other words, the frequency percentage scale of 4
and 5 are totally occupied 48.7% over total frequency. Hence, considerable number of the participants
gave ‘somewhat satisfactory’ response on the overall provision of dependable financial services to MSEs
in ACSI.

30
The frequency of the item is 45.98% on measurement scale which is relative to half of variables and also
which represent ‘strongly dis agrees response on the overall provision of change income in ACSI. The
result also indicates the respondents perceive that ACSI is unsuccessful in provision of undependable
financial services to entrepreneurs’.

Table 4.2. 2: - summarizing suggestion of respondents relative to after joining the credit.
Variable rement Frequency

Percen
Measu

tage
Strongl Semi Strongly
s
Agree Disagree
y Agree Agree Dis Agree
Provide diversified number 201
financial services - - 13 (4.18%) 97 (31.19%) 100%
(64.63%)
ACSI Provide number
dependable financial 1(0.32 6(1.92% 153(49.19%
5(1.6%) 146(46.97%)
services %) ) )

After joining the credit number

service the create job 7(2.27 35(11.2 60(19.29% 109(35.98%
100(32.15%) 100%
opportunities %) 5%) ) )

MSSE and ACSI have number

inter relationships due to 1(0.32 3(0.96% 143(45.68%
30(9.64%) 134(43.1%) 100%
giving credit %) ) )

monitoring and evaluate number

the entrepreneurs to 7(2.25 1(3.55% 143(45.98%
11(3.53%) 139(44.69%) 100%
change their income %) ) )

Total sum of number 149(47.2%)

respondents suggestion 4(2.3%) 13(4%) 23(7.3%) 122(39.2%) 100%

Source;-field survey 2018

Table 4.2.2.1; change Income entrepreneurs after utilizing total summation of respondents.

Meas
Perce
Variable ureme Frequency
ntage
nts
Income and Strongly Strongly dis
Agree Simi agree Dis agree
saving of agree agree
In
entrepreneurs N N N
numbe % % % No % No %
has been o o o
rs
changed after 0.64 4.2 7.71 12 39.22 15 48.23 100
2 13 24
the credit % % % 2 % 0 %
31
Utilization
Source; field survey 2018

Figure 4. 2;-After joining credit

70%

60%

50%

40% agree
strongly agree
30% semi-agree
disagree
20% stronglydisagree

10%

0%
provide fi- dependable after join relationship monitoring
nancial financial credit of MSSE and and small
service service ASCI scale

AS The above figure is explain it, the entrepreneurs who join ACSI more of the cant successful. Because
there is in number of default credit. from the beginning of credit to back payment. For this purpose the
entrepreneurs become poor below the previous poor line .here if the stakeholders’ deal with rules and
regulation may be entrepreneurs breathing well.

4.3. Criteria of ACSI to entrepreneurs to get credit

4.3.1. The criteria set for getting credit are not too harsh

The frequency percentage scale strongly disagree 171(54.98%) disagree 104 (33.44%) semi-agree 14
(4.5%) agree 3 (0.985) strongly agree 19 (6.1%) respectively. the new comer entrepreneurs absolutely not
offered by the ACSI collateral strongly disagree 171(54.99%) disagree 129(41.48%) semi-agree
7(2.25%) agree 1(0.32%) strongly agree 3 (0.96%) sequence. More respondents fail under strongly dis
agree. Because of not soft to entrepreneurs and ACSI use too harsh criteria to entrepreneurs, this way
neglect other and accept another in terms fulfillment of criteria

32
33
4.3.2. The collateral requirement is easy to fulfill

The frequency percentage scale strongly disagree 175(56.27%) disagree 100 (32.15%) semi-agree 14
(4.5%) agree 3 (0.98) strongly agree 19 (6.1%) respectively. the new comer entrepreneurs absolutely not
offered by the ACSI collateral, the youngest unemployment are poor and poor. not haven’t any a means
earnings. the due to collateral who was guarantee for them. hence the collateral can neglect them from
services.

3.3. The collateral is not challenge credit access to entrepreneurs

The frequency percentage scale strongly disagree 151 (48.55%) and disagree 143 (46%) and the
respondents measurement scale which is fail between 151(48.55%) and 143 (46%), which also represent
‘strongly disagree’ response on the overall collateral of ACSI is not characterized provision of financial
services to entrepreneurs which isolate entrepreneurs from credit service .the result also indicates the
respondents perceive that ACSI is not satisfy in operation based on imperfection criteria. The other
respondents shows their data are, strongly agree 5 (1.6%) agree 2 (0.64%) semis- agree 10 (3.21%) Then
the entrepreneurs are not too satisfied at the criteria of ACSI to giving loan.

4.3.4. The criteria of ACSI is satisfy to getting credit service to entrepreneurs.

The frequency percentage scale strongly disagree 139 (44.7%) and disagree 135 (43.4%)

The frequency of the respondents measurement scale which is fail between 44.7% and 43.4%, which also
represent ‘strongly disagree’ response on the overall criteria of ACSI is not characterized provision of
financial services to entrepreneurs The result also indicates the respondents perceive that ACSI is not
satisfy in operation based on imperfection criteria. The other respondents shows their data are, strongly
agree 11 (3.53%) agree 9 (2.9%) semi-agree 17 (5.47%). Then the entrepreneurs are not too satisfied at
the criteria of ACSI to giving loan.

4.3.5. Operates based on a character-based and collateral free lending system

The frequency percentage scale strongly disagree 209 (67.2%) disagree 99 (31.84%) semi-agree
3(0.96%) agree 0(0%) strongly agree 0(0%) on operation of ACSI based on character and collateral great
problem to lending system in provision of financial services to entrepreneurs is only 67.2%. Hence, the

34
majority of the participants gave ‘strongly dis agrees’ response on the overall operation of ACSI based on
character based lending system. The total summarize table of under this question as follows

Table 4.2. 3 Criteria of ACSI to entrepreneurs to get credit

Frequency
Measurement Percentag
Variable Strongl Semi Strongly
s Agree Disagree e
y Agree Agree Disagree
criteria set for getting 3(0.98 104(33.44 171(54.98
Numbers 19(6.1) 14(4.5)
credit are not too harsh ) ) )
collateral requirement 3(0.98 100(32.15 175(56.27
Numbers 19(6.1) 14(4.5)
is easy to fulfill ) ) )
The collateral is not
2(0.64 10(3.21 151(48.55
challenge to Numbers 5(1.6) 143(46)
) ) )
entrepreneurs
criteria of ACSI is
17(5.47
satisfy to Numbers 9(2.9) 11(5.47) 135(43.4) 139(44.7)
)
entrepreneurs
Operates based on a
character-based and
Numbers 0 0 3(0.96) 99(31.84) 209(67.2)
collateral free lending
system
Source;-survey 2018

The total summation of this analysis is more respondents are criticized Criteria of ACSI .the criteria that
offered is isolate most entrepreneurs. Hence the suggestion stockholders are describe it strongly disagree
and disagree. This is numerically as shows the above table higher amounts of percentage.

35
Table4.2.3.1. Criteria of ACSI to entrepreneurs to get credit

Measure
Variable Frequency
ments Percentage

Strongly Semi Strongly dis 100%

Criteria of agree Dis agree
agree agree agree
ACSI to
In N
entrepreneur No % % No % No % No %
numbers o
s to get
credit 1.2 3.2 16 54.01
4 9 2.9 10 120 38.6
8 1 8
Source; - field survey 2018

The frequency value of the item is 54.01% on measurement scale which is occupied greater than half
respondents which also represent ‘strongly satisfy’ response on the overall operation of ACSI criteria
based collateral character lending system in provision of financial services to entrepreneurs. The result
also indicates the respondents perceive that ACSI is not offered successful in operation based on
character and collateral lending system.

Figure 4. 3 :- criteria of credit

70.00%
60.00%
50.00%
40.00%
30.00%
agree
20.00% strongly agree
strongly disagree
10.00% disagree semi-agree
0.00% semi-agree disagree
strongly agree strongly disagree
it
r ed al l agree
c er ra I
of
lla t
ate CS al
r ia c o o ll o
A ter
e c t lla
iat eo
f
eu
r
co
cr g en d
en pr se
all t re r ba
h
c en cte
s fy ara
ti ch
sa

36
This figure, 4.3 is explaining the criteria of ACSI for giving credit is simplicity. Because of its not
decentralized poor and poor/absolutely poor. And the bureaucracy offed poor society. Hence the
respondents suggestion revolves with strong disagree and disagree.

4.4 To What extent employment opportunities are created by the entrepreneurs

4.4.1. Create employment opportunities to entrepreneurs

The frequency percentage scales of negative response disagrees and strongly disagree on timely provision
financial services to entrepreneurs is strongly disagree 143(45.98%) disagree 149 (47.9%) respectively.
In other words, the frequency percentage scale of disagree and strongly disagree are totally occupied
47.9% over total frequency. Hence, the majority of the participants gave ‘strongly disagree’ response on
the overall employment creation of ACSI to entrepreneurs.
The frequency value of the item is 47.9% which is cover more than half respondents and also represent
‘strongly disagree’ response on the overall employment creation of ACSI to entrepreneurs. The result
also indicates the respondents perceive that ACSI is not successful in employment creation to
entrepreneurs. The rest frequency of respondents are semi agree fail under 5(1.6%), agree 6 (1.92%) and
strongly agrees are 8(2.57%) respectively. From this as the entrepreneurs considered it is not sufficient
for selves rather than create job opportunity for others.
4.4.2. Helps existing business growth of entrepreneurs
The frequency percentage scale of negative response (disagree) and (strongly disagree) on encouraging
existing in business entrepreneurs to be financially independent in ACSI is disagree) 147 (47.2%) and
strongly disagree155 (49.92%) respectively. In other words, the frequency percentage scale of disagree
and strongly disagree are totally occupied 49.92% over total frequency. Hence, the considerable number
of the participants gave ‘strongly disagrees ‘response on the overall not encouragement of entrepreneurs
to be financially independent in ACSI. Next this the rest respondents are semi agree were 6(1.92%)
respondents and agree respondents are 3, (0.96%) but nothing is strongly agree. 0(0)
4.4.3. Encourages entrepreneur to be satisfied financially independent
The frequency percentage scale of positive response disagree 134 (43.1%) and strongly disagree
173(55.62%) not encouraging entrepreneurs to be financially dependent in ACSI is 43.1% and 55.62%
respectively. In other words, the frequency percentage scale of disagree and strongly disagree are totally
covered 55.62% over total frequency. Hence, the considerable number of the participants gave ‘strongly
disagrees response on the overall to not encouragement of entrepreneurs to be financially independent in

37
ACSI. The rest respondents suggestion is concluded under semi agree, 4(1.28) while the next decisions
like agrees and strongly agree 0(0).

4.4.4. The ACSI focus only on the giving credit service rather than the entrepreneurs

The frequency percentage scale of negative response (disagree) and (Strongly disagree) on the giving
credit availability source of fund is only (Strongly disagree 177(56.91%). Hence, disagree) 100 (32.15%)
the majority of the participants gave ‘disagree’ response on the availability credit service rather than
entrepreneurs in ACSI. The next respondents are agree 18(5.8%), semi agree also 14(4.5%) strongly dis
agree is that 2(0.64%)

The percentage of the respondents are encompasses 56.91% which also represent ‘disagree’ response on
their attention of ACSI credit gave rather than entrepreneurs financial adequate. The result also indicates
the respondents perceive that ACSI do not attention to entrepreneurs to satisfy.

4.4.5The credit you get from ACSI is Promote economic growth

The frequency percentage scale is that negative response (disagree145 (46.62 and (Strongly disagree147
(47.28%)) according to this respondents the credit which get from ACSI is discouraging entrepreneurs to
be financially independent in ACSI is semi agree 10(3.21) were as strongly agree is that 9(2.89%)
respectively. But no on agree statements. In other words, the frequency percentage scale .the respondents
that criticize that a person whose use ASCI is never stay as the previous life existence. Hence more than
half respondents suggestion fail between disagree and strongly disagree are totally occupied 47.26% over
total frequency. Hence, the considerable number of the participants gave ‘Strongly disagree’ response on
the overall not to Promote of entrepreneurs to be financially independent in ACSI

38
 Table 4.2. 4:- Total summarize of questions survey

Frequency Per
Measure Strong cen
Variable Semi Strongly
ments Agree ly Disagreed tag
Agree Disagreed
Agree e
Number’s 6 8 149(47.9 100
Job Create opportunities 5 (1.6%) 143(45.98)
(1.92%) (2.6%) %) %
Helps existing business Number’s 3(0.96 6(1.92% 147(47.19
- 155(49.92%) S
growth %) ) %)
satisfied financially Number’s 4(1.28% 134(43.1
- - 173(55.62%) 100
independent ) %) %
The ACSI focus only on the Number’s
158(5.8 2(0.64 14(4.5 100(32.15
giving credit service rather 177(56.91%) 100
%) %) %) %) %
than the entrepreneurs
The credit you get from Number’s
9(2.89 10(3.21 145(46.62
ACSI is Promote economic - 147(47.26%) 100
%) %) %) %
growth
Source; - field survey 2018

Here more respondents are reacted around disagree and strongly disagree. Hence the credit which gave to
entrepreneurs is not enough to changing his/her business well. According to the respondents, the crises
more than their benefits as we understand from the above table

39
Table 4.2. 4.1: The general summation respondents’ level of extent employment opportunities are
created by the entrepreneurs

Meas Frequency
Percent
Variable urem Strongl Semi- Disagre Strongly
Agree age
ents y Agree Agree e Dis Agree
To What In No % N % N % No % No % 100%
extent numb o o
employment ers 7 2.2 4 1.3 6 1.92 13 43. 159 51.13
opportunities 5% % % 5 4% %
are created by
the
entrepreneurs
Source;-field trip survey 2018

This table shows beneficiaries of entrepreneurs.so if the government sees critically it’s very important.
The entrepreneurs are no more beneficiary from ACSI rather than defected their life. But some things are
better than nothing.

40
Figure 4. 4 : - Job creation opportunity.

60.00%
50.00%
40.00%
30.00%
20.00% agree
strongly disagree strongly agree
10.00%
disagree semi-agree
0.00% semi-agree disagree
strongly agree strongly disagree
ty
u ni th t agree
rt r ow den ur
s y
o g n e
p ss pe en em
op e e r co
n
n in d p
atio b us sfy ntre tee
cr
e n ati e o
b n gi ials
s on r om
jo c p
isti an oc
u SI
ex fin IS f AC
AC

From the above figure we consider the ACSI efforts towards create job opportunity to
entrepreneurs. There no more strong relationship between MSSE and ACSI when the
entrepreneurs cooperated. Because of no regulation between them .which ties each other. Both
can run for the only their office benefit rather than provide financial entrepreneurs.

41
 Table 4. 6: -The general summery of all questions
Frequency
Questionaries’ Strongly Strongly Percentage
Agree Semi-Agree Disagree
Agree Disagree
Supply appropriate financial
0 0 25(8) 37(11.9) 249(80.1) 100%
services
ACSI services are equal accessibility
9(2.9) 33(10.61) 53(17.04) 89(28.62) 127(40.83) 100%
for all entrepreneurs
Criteria Provide diversified financial
- 30(9.2) 39(13) 186(59) 56(18) 100%
service to the entrepreneurs
ACSI has provide dependable
14(4.65) - 16(5.14) 68(21.86) 213(68.5) 100%
financial service to the entrepreneurs
ACSI criteria promote equal
9(2.9) 15(4.82) 18(5.8) 160(51.44) 109(35.04) 100%
accessibility for all entrepreneurs.
Provide diversified financial services 201(64.63%
- - 13(4.18%) 97(31.19%) 100%
to the entrepreneurs )
ACSI Provide dependable financial 153(49.19%
1(0.32%) 6(1.92%) 5(1.6%) 146(46.97%) 100%
services from the previous )
entrepreneurs create opportunities to 109(35.98%
7(2.27%) 35(11.25%) 60(19.29%) 100(32.15%) 100%
unemployment )
MSSE and ACSI have inter 143(45.68%
1(0.32%) 3(0.96%) 30(9.64%) 134(43.1%) 100%
relationships due to giving credit )
An ACSI monitoring and evaluate 143(45.98%
7(2.25%) 1(3.55%) 11(3.53%) 139(44.69%) 100%
the entrepreneurs )
The criteria set for getting credit are
3(0.98) 19(6.1) 14(4.5) 104(33.44) 171(54.98) 100%
not too harsh

42
 Frequency
Questionaries’ Strongly Strongly Percentage
Agree Semi-Agree Disagree
Agree Disagree
The collateral requirement is easy to
3(0.98) 19(6.1) 14(4.5) 100(32.15) 175(56.27) 100%
fulfill
The collateral is not challenge credit
2(0.64) 5(1.6) 10(3.21) 143(46) 151(48.55) 100%
access to entrepreneurs
I Satisfy at the criteria of ACSI to
9(2.9) 11(5.47) 17(5.47) 135(43.4) 139(44.7) 100%
getting credit service
character-based and collateral free
0 0 3(0.96) 99(31.84) 209(67.2) 100%
lending system

Create employment opportunities 6(1.92%) 8(2.6%) 5(1.6%) 149(47.9%) 143(45.98) 100%

Helps existing business growth of 155(49.92%

3(0.96%) - 6(1.92%) 147(47.19%) 100%
entrepreneurs )
entrepreneur to be satisfied 173(55.62%
- - 4(1.28%) 134(43.1%) 100%
financially independent )
The ACSI focus only on the giving
177(56.91%
credit service rather than the 158(5.8%) 2(0.64%) 14(4.5 %) 100(32.15%) 100%
)
entrepreneurs
147(47.26%
ACSI is Promote economic growth - 9(2.89%) 10(3.21%) 145(46.62%) 100%
)

43
CHAPTER FIVE:

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1. Summary
The study conducted survey of entrepreneurs’ questionnaires. The survey had a response rate of
68.48% of the study respondents were males while the remaining 31.51% were females. 49.21%
of the respondents indicated illiterate and literate 28.93% of the respondents are diploma as their
level of education, whereas only 21.86% of the respondents had Bachelor’s Degree.
The result of a likert scale measurement indicated that, inadequate source of cheap fund that
dissatisfies the demand of ACSI, lack of fair accessibility, collateral. and criteria and capacity to
run the business, lack of solid credit risk management policy, in adequate clients’ information,
clients’ utilization of loans to personal consumption rather than in investments activities, for the
problem of collateral and interest rate the entrepreneurs’ not efficiency to run their business,
tough competition from the industry, clients’ requirements of innovative and diversified products
and services, low saving size, inability to provide products that could address the needs of its
clients and failure to consider its operations as a significant means to generate revenue were the
major challenges of ACSI.
The result of a likert scale measurement also indicated that, the respondents perceive that ACSI
was not successful addressed financial services, to entrepreneurs to provision of diversified
financial services, job creation opportunity, provision of socio-economic benefits, operation
based on character and collateral free lending system, provision of loans at reasonable interest
rate, increasing the income and staff motivation and well-designed incentive system in supply of
appropriate financial services, in provision of dependable financial services, helping the overall
existing business growth and frequent performance no more visits of MSSEs.

The result of a likert scale measurement further indicated that, ACSI failed to: promote all kinds
of businesses of entrepreneurs’, effectively against poverty, make alliance with commercial
banks and filed to work for continuous development and stability.

44
5.2. Conclusions

To achieve the objectives of providing financial support to entrepreneurs faced different

challenges emanated from different sources. The objective of this study is to identify the role of
saving and credit institutions towards meeting the financial needs of entrepreneurs! And the
result of the study revealed that majority of entrepreneurs related issues of the organization and
all issues of stakeholder’s related rose were perceived by the respondents as challenges for
ACSI. In addition, the issues raised related to that of clients’ are also considered by the
respondents as in numbers challenges.

5.3. Recommendations
Based up on the study‘s findings and conclusions the following recommendations are proposed
for action.
 ACSI needs to treat entrepreneurs at different level to encourage in different ways like
providing fairness of access and revised to collateral mechanism, financial incentives,
fulfilling the necessary equipment’s and the regulation of both MSSE and ACSI common
share responsibility to accomplishment of operations;
 ACSI must enhance its entrepreneur’s capacity and bring promoted beneficiary in order
to eradicate poverty and promote the welfare of entrepreneurs;
 ACSI needs to exert its effort on improving the entrepreneurs about the loan, give
uninterrupted criteria related with credit and utilizing of the loan on business activities;
 ACSI needs to design and implement strong credit risk management policy so as to
minimize default rate;
 ACSI needs to create awareness so that customers willingly assist the institution by
giving required personal information that will help build strong relationship with the
businesses;
 If Effort should be done to provide loans at reasonable with fair interest rate.
 It is better if the level of access to credit is fairly addressed to entrepreneurs.
 The criteria for collateral credit required some correction.
 The rules and regulation of MSSE and ACSI should be tied share some common
responsibility and accountability about benefit and unbenefits of entrepreneurs.
 It is better if age boundary will be revised to be offer equal jobless and unemployment’s.
45
 If minimize heterogeneity of cooperative entrepreneurs, in terms of age, experience,
education level,
 If MSSE office addressed fact information to entrepreneurs payback and their deposits
interest rate when they corporate entrepreneurs.
 Avoid hidden rent seeking through integrating rules and regulation
 The percentage payback of the credit ought to be clearly portrait to the borrowers fairly.
 If the feasibility of business should be not ordered ACSI, as it comfort them not being
accountable.
 If avoid/supervise by neutral supervision which hidden interest rate, insurance, etc.
 The office ought to be hold under the government structure the entrepreneurs economical
defect may be minimize.

46
REFERENCE
ADB (2000), Asian Development Bank
Addis Credit and Saving Institution. (2014). Retrieved August 24, 2017, from Addis Credit and
Saving Institution: http://adcsi.org/en/about-us
Alemut(2002): www.hisoryof credit repaymentperformance.com
Alemayehu, O., & Fenet, B. (2016). Performance of Formal Rural Financial Institutions in
Ethiopia: Country Review. Journal of Poverty, Investment and Development , 27 (1), 12-24.
Addis Credit and Saving Institution. (2014). Retrieved August 24, 2017, from Addis Credit and
Saving Institution: http://adcsi.org/en/about-us
Alemayehu, O., & Fenet, B. (2016). Performance of Formal Rural Financial Institutions in Ethiopia:
Country Review. Journal of Poverty, Investment and Development , 27 (1), 12-24
Anne Perkins (2008), Short History of Micro Finance, www.theguardian.com CSA (1999),
Central Statistical Agency Report, Ethiopia
Degefe Duressa (2009), Microfinance in Ethiopia, Ethiopia
Duval (1996) www.characteristcsofindividuallendingmodel.com
Gibbons, Davis S (1992), The Grameen Reder, 2nd edition, The Grameen Bank
Godiqine (2004), Microfinance Repayment Performance in Bangladesh, Bangladesh .IDS
Institute of Development Studies
Khandiker, Shahidur R (1995), Grameen Bank Performance and Sustainability, World Bank,
Washington
Ledgerwood (1999), Microfinance: An institutional and Financial Perspective
Maria Otero (1994), the New World of Microenterprise
Mengistu B (1997), Determinants of Micro Enterprise Loan Repayment and Efficiency of
Screening Mechanisms in Ethiopia, Ethiopia
Olomola (2000), Determinates of Small Holder Loan Repayment Performance
Pindback (1981), Economics Forecast, 2nd edition. McGraw Mill Book Company, New York.
Rechard C. (1948): Farm Planning as Basic for Extending Agricultural Credit.
Reinke (1996), Altering Models for Micro credit in South Africa, South Africa
Robert Peck Christen (1997), www.centerforfinancialinclusion.org
Von Pischke (1991), Debt Capacity and the Role of Credit in the Private Economy World Bank,
(2008)

47
 APPENDIX
Questionnaire

RIFT VALLEY UNIVERSITY

College of business administration, Department of business

Administration

Questionnaire to be filled by entrepreneurs

Dear respondents,
The purpose of this study is to assess the accessibility of credit, criteria, changing income f
entrepreneurs and job creation opportunity of Addis Credit and Saving Institution (ACSI) in
provision of financial service to entrepreneurs’ .To this end, the study intends to gather data from
selected participants’ entrepreneurs’ questionnaire. The participation is fully voluntary and
responses will be confidential.

I would appreciate your favorable consideration in completing the questionnaire and assisting me
in the research endeavor.
In case if you have any queries do not hesitate to call me at +251910963740 or forward your
message via mail shelemzewde1@gmail.com.

Thank you in advance!

Sheleme zewde

48
 Rift Valley University

Department of business Administration

Questionnaire to be fill by Entrepreneurs who’s new organized to get credit from ACSI

Dear Respondents,

This questionnaire is prepared by researcher; a student to RVU, university Master’s program

in MBA. Its objective is to assess ‘’the role of saving credit and credit institution towards
meeting the financial needs enterprise ‘’ purposes and shall be kept strictly confidential.
Please feel free to share your experiences regarding the ACSI institution service and mark (√)
your answer on your profile alternative box ,as well as write your answer from the given
choose and write the reason of your answer on the given space. Thank you for your kind of
corporation.
1. Background of the respondents

1.1. Gender A) Male B) Female

1.2. Age ;-A) 18-24 B) 25-30 C)31-35
1.3. Educational level ; A) Illiterate B) Primary(1-8) C) High school (9-10)
D)preparatory (11-12) E)TVET F) BA Degree and above
1.4. Marital status;- A) Married B) Unmarried C) Divorce
1.5. Religion :- A) orthodox B) Muslim C) catholic D) protestant

49
 Measurement of access ACSI to entrepreneurs

N.B = A=Agree

N =Newtral

SA=strongly agree

DA=Disagree

SDA= strongly Disagree

Questions for entrepreneur’s SA A N DA SDA

Supply appropriate financial services
ACSI services levels are equal accessibility for all
entrepreneurs
Level of Provide diversified financial service to the
entrepreneurs
ACSI has provide dependable financial service to the
entrepreneurs
ACSI criteria promote equal accessibility for all
entrepreneurs.
Provide diversified financial services to the
entrepreneurs
ACSI Provide dependable financial services from the
previous
entrepreneurs create opportunities to unemployment
MSSE and ACSI have inter relationships due to
giving credit

An ACSI monitoring and evaluate the entrepreneurs

The criteria set for getting credit are not too harsh

The collateral requirement is easy to fulfill

50
Questions for entrepreneur’s SA A N DA SDA
The collateral is not challenge credit access to
entrepreneurs
I Satisfy at the criteria of ACSI to getting credit
service
character-based and collateral free lending system
Create employment opportunities
Helps existing business growth of entrepreneurs
entrepreneur to be satisfied financially independent
The ACSI focus only on the giving credit service
rather than the entrepreneurs
ACSI is Promote economic growth

If you have any idea/ suggestions ,please explain it

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Thank you very much for you co-operation

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 1. የምላሾቹ የኋላ ታሪክ

1. ፆታ A) ወ B) ሴ

2. እድሜ;-A) 18-24 B) 25-30 C) 31-35

3. የትምህ ደረጃ; A) የቀለም ትምህርት B) 1 ኛ ደረጃ (1-8) C) 2 ኛ ደረጃ (9-10) D)መሰናዶ ት/ት
(11-12) E)ቴክኒክና ሙያ F) BA/BSC ና ከዚያ በላይ

4. የጋቢቻ ሁኔታ; - A) ያገባ B) ያላገባ C) የፈታት

5. ሃይማኖት፤-A) ኦርቶዶክስ B) ሙስሊም C) ካቶሊክ D) ፕሮትታንት

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ለኢንቴርፕሮች የአዲስ ብድር ተቋም ተደራሽነት መለኪያ ጥያቄ

እስማማም ፤እጅግ በጣም እስማመለዉ ፣በፊፁም አልስማማም

እጅግ በጣም እስማማለዉ . በከፊል እስማማለዉ

እስማማ እጅግ በከፊል አልስማማ በፊፁም

ለኢንተርፕሬኔሮች መጠየቂያ ለዉ በጣም እስማማለ ም አልስማማም
እስማማለ ዉ
ዉ
የአዲስ ብድር ተቋም መስፈርት ለሁሉም ኢንቴርፕራይዞችእል
ያዳርሳል
የአዲስ ብድር ትረቱኢንቴርፕራይዞች የተበደሩት ብር ለይ
ነዉ
አዲስ ብድር ተቋም ለብዙሃኑ ኢንቴርፕራይዞችየገንዘብ
አገልግሎት ይሰጣል
የአዲስ ብድር ተቋም ተቋም ለሁሉም ኢንቴርፕራይዞች
እኩል የገንዘብ ተደራሽነት ይሰጣል
አግባብ በለዉ መልኩየገንዘብ አገልግሎት ይሰታል
አዲስ ብድር ተቋም ብድር ለማገኘት ያሉት
መስፈርቶች የምብደዉ አይደለም
አዲስ ብድር ተቋም ኢንተርፕራይዝ ይታተላል ፡ይገመግማል

ጥ.አ/ኢ/ና አዲስ ብድር ተቋም አሰራር መሰረት ተናቦ

ይሰራሉ፡
አዲስ ብድር ተቋም የሚያቀርበዉ አገልግሎት
የኢንተርፕራይዞች ገቢ በፊቱ የተሻለ ነዉ፡
አዲስ ብድር ተቋም ለእንተርፕራይዞች በአግባቡ

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አገልግሎት ይሰጣል‹
ዋስትናብቻ ላይ ያልተንጠለጠለ ብድር ይሰጣል፡
አዲስ ብድር ተቋም መስፈርቶቹ ለኢንተርፕራይዞች
አመቺ ነዉ‹፡
የዋስትና ብድር ተደራሽነቱ ኢንተርፕራይዞች
አያስቸግሪም
አዲስ ብድር ተቋም የሚያስፈልገዉ ዋስትና
ለማሟላት ቀላል ነዉ፡
ብድር የሚያስገኝ መስፈርት ብዙም የሚብድ
አይደለም
አዲስ ብድር የኢኮኖሚ እድገት ያረጋግጣል
አዲስ ብድር ተቋም የሰጠዉን ብድር ላይ ሳይሆን
ኢንተርፕራይዞች ላይ ትኩረት ያደርጋል
ኢንተርፕራይዞች ከአዲስ ብድር ተቋም በሚያገኙ
ብድር በገቢያቸዉ ደስተኞች ናቸዉ
አዲስ ብድር ተቋም የኢንተርፕራይዞች ስራ ያሳድጋል
አዲስ ብድር ተቋም ለተቃጣሪ ጥሩ ስራ የፈጥራል

በዚህ ዙሪያ ያለዎትን አስተየዎቶ አስቀምጡልን

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ስለተደራጃችሁ እናመሰግናለን

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