THE ROLE OF MICRO FINANCE INSTITUTION

INSTRENGTHENING SMALL AND MICRO BUSINESS

ENTERPRICE (IN CASE OF FITCHE TOWN MICRO FINANCE
OFFICE)

SELALE UNIVERSITY

COLLAEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANFE

PROPOSAL PAPER

MARCH/2024

FITCHE, ETHIOPIA

ABSTRACT
The main task of this study will be to assess the role of microfinance institutions in
strengthen small and micro enterprise in Fitche town due to various limitations
particularly time and lack of sufficient literature review the sample of the study will
consist of 4 microfinance institutions and 35 small micro enterprise in Fitche town.
Judgmental sampling has been will be used to select both Small micro enterprise and
MFIs heads. In case of gathering information primary sources of data will be used open
and closed ended questionnaire will be the main instruments employed the data obtain
will be detailed carefully arranged and structured in table and analyze using percentage.
The results obtain from the study point out that MFIs will play the greatest role in
providing the loan, technical support which as skills, training on how to use their money
effectively and how to run their business properly. Recommendations will be drawn
based on the finding that so as to MFIs need to provide continue and sufficient skills
development training for SMEs members.

Acronym
•CSI..........................Credit and saving institution
•FDRE.......................Federal democracy republic of Ethiopia
•ILO..........................International labor organization
•MDG......................Millennium development goal
•MFI........................Microfinance institution
•MOTI.....................Ministry of trade and industry
•MSE.......................Micro and Small enterprise
•MSEDP...................Micro and small enterprise development program
•NGO.......................Non- governmental organization

TABLE OF CONTENTS
Abstract………………………………………………..……………………I
Acronym………………………………………………...……………....II
Chapter one
1. Introduction ……………………………………………………………………........1
1.1Background of the study………………………………………........ …….1
1.2 Statement of the problem…………………………………… …………...2
1.3 Objective of the study………………………………………………………….3

. General objective ……………………………………..............................3

. Specific objective ………………………………………………………................3

1.4 Scope of the study……………………………………………………………….....4

1.5 Significant of the study………………………………………………………… ..4
1.6 Limitation of the study……………………………………………………………..4
1.7 Organization of the study………………………………………………………...4
Chapter two
2 Review of
literature……………………………………………………………………...5
2.1 Concept of microfinance and small enterprises……………………5
2.2 How microfinance come to Ethiopia……………………………………….6
2.3 Role of microfinance and small enterprises in
economy………………………………….6
2.4 Prudential regulations as a tool to implement an MFIS effective government in
Ethiopia….7
2.5 Effective government of MFIS in
Ethiopia……………………………………………….7
2.6 Micro finance
targets…………………………………………………………………..........…..8
2.7 Small
business………………………………………………………………………................
…..9
2.8 Distinction between micro and small enterprise…………………………………...9
2.8.1 Small
enterprise…………………………………………………………………..................10
2.8.2 Micro very small
enterprises…………………………………………………….......…11
• Common characteristic of micro and small enterprise…………………......11
• Contribution of small business to the economic development…….....11
2.2 Empirical
review………………………………………………………………….........................12
2.3 Research
Gap………………………………………………………………………........................1
2
Chapter three
• Research Design
…………………………………………………………………...........................13
• Source of Data ………………………….
…………………………………………...........................13
3.3 Method of data
collection………………………………………………………………................13
• Target population, sampling techniques and sample size…………………………14
• Sampling size and Sampling
technique………………………………………………..........15
• Method of data
analysis……………………………………………………………….....................15
Chapter four
4.1Time and budget plan.....................................................................20
4.1.1 Time plan......................................................................................20
4.1.2 Budgeted Cost..............................................................................22
References
Appendix

CHAPTER ONE
INTRODUCTION
1.1 Back ground of the study
Microfinance is the provision of financial service to lower income poor and very poor
self – employed people. As micro finance institutions have become more efficient and
effective increased their current based on service, they have begun to expand their service
through different product offering such as, micro saving, fixable loan payment and
insurance. The theories of joint liability contracts progressive lending, frequent
repayment and flexible collateral adequately explain the higher rate of payment, for such
case micro finance institution to the successful, the should be sustainable financial as well
as institutionally. On top of sustainability one has to include developmental effect like
income on the target group as core measure of success. For agency that are involved in
the development or in assisting the development of micro enterprise institution, it is
recommended that profitability and sustainability should be final goals and therefore the
only indicators of success (Stieglitz.s.e, 1990)
On other hands micro finance is the provision of financial service to the poor people with
very small business or business project (marzzy,2006). For example same micro finance
is a movement those objective is a world in which as many poor and near small enterprise
as will permanent access to an appropriate range of high quality financial service
including not just credit but also saving insurance and fund or other micro finance is way
to promote economic development and growth the support to micro finance and small
business enterprise (Robison, 2001)
The formal micro finance institution began in Ethiopia in 1994/95 with the government
/licensing and supervision of micro finance institution proclamation (MFI) to extend to
both the rural and urban people of the country (Gobeze, 2005)
The establishment of a long lasting micro finance institution serving a large number of
poor people as has been a crucial element of Ethiopia as development strategy although
an Ethiopia the establishment of microfinance institution relatively a recent phenomenon
within the last decade.
The number of micro finance institution the fund which have been allocated to them and
number of people will be benefiting from the service will be rapidly growing.
Micro enterprise will have a significant employment contribution and can operate
successful in the place of small town are large and medium enterprise in relation to job
creation the small micro finance sector contribute to the important socio economic
objective, such as grass national product (GNP) value added and foreign exchange
saving. Finally in order to promote micro enterprise in city of town. It is there is for
essential to provide the buying local business more business will be encouraged to form
network. Association and market local demand shall also enhance way made up people
with access to finance, improving information availability import (Essayas, 2004)

• Statement of the problem

The roles of micro finance is to strengthen the development of micro enterprise to
constitute the back bone of an economy. SME sector plays a vital role in the development
of the country, the World bank (1994) indicate this industrial development was earlier to
has occur because of large enterprise however, starting in the late. Most micro finance
institution has tried to the their best by insured that the service offered meet the demand
of customer in that operational area are as efficient as possible cost minimized that the
fees and interest rate are sufficient to cover of the cost and that clients are motivated to
repay loans (Carter, John, Evans, 2001).
Micro finance is seen as one of the most efficient instrument to promote economic
development and to eradicate poverty in poor countries numerous micro finance
development and micro finance institution all over the world have high proved the
financial service can be offered a sustainable basis without programmer that support the
industry as a whole ( Lidger, wood 1999)
Defer interest entered area of formally established micro finance institution the main
source of micro credit in the urban and rural area are accessed informally through
relatives and many leaders. Informally through formal institution remain important
sources of micro credit for rural and urban poor economic communities. So the creation
of microfinance institution will be established by proclamation 40/1965 issuing by
Ethiopia governmental in 1996 solved the problem people face in informal institution
even if Ethiopia will strong culture of informal institution system the creation of micro
finance institution will lead them to corporate people informal way and made up people
to solve poverty together informally small and micro enterprise (Tagegn and Mulal2005).
Thus researcher, will be assess the role of micro finance institution in strengthening
small micro finance enterprise in Fitche town.

Research Question
The following research questions are formulated
1, what are the technical support that provide supportive fund from micro finance
institution to the micro and small enterprise?
2, How micro finance institution are aware about the small micro enterprise of the
town?
3, what is the role of micro finance institution toward micro and small enterprise?

1.3. Objective of the study

 1.3.1 General objective.
The general objective of the researcher will be to assess the role of micro finance
institution in strengthening the role of micro and small business enterprise.
1.3.2 The specific objective of the study
1. To identify the specific technical support that provide supportive found from
micro finance institution to the micro and small enterprise
2. To study the effective utilization of capital loan provided by MFI.s to micro
and small enterprise.
3. To assess the role micro finance institution towards micro and small
enterprises.

1.4. Scope of the study

The study will be conducted on the role of micro finance in strengthening small micro
finance even it as a whole and to the worker of small enterprise due to vary limitation
of Fitche Town. This study will be limited to assess the role of micro finance institution
in strengthening micro and small enterprise division of the town.

1.5. Significance of the study.

Study on the area of micro finance and small enterprise has great significant to
community of Fitche town on particularly and also to the whole country in general. The
researcher will be provide further information for the micro finance plans as well as
result for empower the small micro enterprise is must be help the literature in the experts
of micro finance to follow clear approach for the provision of necessary support for small
micro enterprise.
The contribution for the micro and small business enterprise to improvement of micro
finance institution system in the city is in particular and to the country in general. It will
give present picture for the research the picture of micro finance institution role in
strengthening small micro enterprise.
 1.6. Limitation of the Study

There are some limitations to conduct the study, since the study does not cover all SME
of Fitche town, the result of the study may not give full information about the role of
MFI in strengthening SME because of:-

• Financial source is not sufficient to gather all relevant information.

• Questionnaire method is primary used to gather primary data. However, the

information may not free from personal bias of respondent.

• Some of the respondent may not give response sincerely.

1.7. Organization of Study

This study will be organized in to five chapters. Chapter one will deals
with the introduction part which containing, the background of the
study, statement of problem, objective of the study, significance of the
study, significance of the study, scope of the study and limitation.
Chapter two summarizes review of literature. Chapter three will deal with
research methodology, chapter four contains data presentation and

analysis and chapter five contains conclusions and recommendation.

 CHAPTER TWO
2. REVIEW OF LITRATURE
2.1. Concept of microfinance and small enterprises
Informal financial market, the poor are exclude from establishing their own small
business because they are not recognized as being credit worthy i.e. U.N able to save,
lacking verifiable credit history or goods to offer as collateral to secure loans forcing
them to turn to traditional money lenders. Recognizing the needs, capacity and the talents
of the poor to repay the loans, micro lending programs are extended the group members
rather than to individuals. In view of the contingent group loan approach, it is generally
assumed that group members would have an incentive to monitor their programs and that
this would lead to a greater rate of repayment of their loans since each borrowers credit
worthiness would be a factor in the overall credit worthiness would be a factor in the
overall credit worthiness of the group (Robinson 2001). In short, the success of group
lending creates positive future loans for members to repay because in case of default, no
member of group will receive future loans for repayment, their repeat lending to the
group. In group lending the probability of moral hazard is largely reduced because all
borrowers are members of the group and subject to peer pressure, group dynamics,
cohesiveness, and the ultimate success of each member of the group (Liedhom and mead,
1997)
In simple terms micro credit refers to process of lending small amount of seeds money to
groups rather than to one person, without collateral, to help poor people to establish their
own business. Micro credit especially designed for eco-entrepreneurship, encourages
innovation in rural and urban areas to produce environmentally, friendly produce market
place. Thus, philosophy of demand led micro credit finance visualize the poor not as
objectives of charity but as socially productive persons. Micro credit is as investment in
people, the poor and their abilities, which sharpens entrepreneurial, initiative and
strengthens developing countries’ economies. Micro credit is a vital tool for economic
development because it enables the poor to build assets, increase income and reach self
sufficient (peter. 2001). Micro enterprises are those business enterprise found in all
sectors of the Ethiopia economy with paid up capital of hot exceed birr 20000 and with
less than 10 employees but in excluding high technical consultancy firms and other
technical establishments. Small enterprise are business enterprise found in all sector of
Ethiopia economy with paid up capital of more 500,000 and with less than 50 employees
but including high technical consultancy firms and other high technical establishment.
Even though, there is no universal definition of micro and small enterprise (MSES) there
is agreement as to their general characteristics in developing countries. Overall MSE are
characterized by low levels of technology. Limited access to credit, lack of managerial
capacity and lack of linkages with the modern economy and also micro enterprise are
defined as employing up to 50 workers (Lidger wood, 1999).

2.3. Role of micro finance and small enterprises in economy

There are in fact several points concerning the significance and role of micro and small
enterprises in many literatures written on the subject. Micro and small enterprises are
justified for the following recourses (Rapodaki and chami 2002).
• They offer potential for resources mobilization growth in developing countries
will be constrained by shortage of capital industrialization.
• The centralization argument small scale enterprise will be desirable because they
can be located in rural and small town or village areas. Often large and medium
industries are concentrated in little urban migration. This flow of people from
rural area to urban areas could create social problem to the urban centers on the
one hand and draw productive labors focus from the rural areas on the other
hands.
• They are sources of income and employment for many people.
• They are serving as agent of rural transformation: they constitute centers
innovations as well as economic and social changed.
 • They are flexible and adapt to market changes quickly.
• They are seed for development entrepreneurial and offer excellent opportunities
for enterprises and managerial talents to develop and mature the critical shortage
of which will be often stressed as a major handicap to economic development of
most developing country.
• They add to verify of consumer goods. They produce relatively chapter foods and
services locally using labor intensive methods. These satisfy the needs of the
people particularly the poor people that are why contributing to variety of
consumer goods.
2.4. Prudential regulations as a tool to implement an MFIS effective
government in Ethiopia
Based on the development of the microfinance industry at national and global
level, Ethiopia took the direction of building sustainable deposit taking MFIS to
deliver financial services to those who has be no access to formal banks. This
required establishing sustainable financial institutions operating on sound
commercial principles that can attract private capital investment and private
saving in order to increase permanent access to financial services (Ibid).
Micro finance would be the part of the financial sector. The need for providential
regulation and supervision has also brought the of the MZIS under Ethiopians
monetary and financial policy frame work.

2.5. Effective government of MFIS in Ethiopia

Prudential regulation is very critical in ensuring in the sustainability of MFIS. It
also plays a key role in ensuring governances. According to achieve and gonzo 3-
vega (1993) prudential regulation of MFIS refers to government regulation to that
should serve three basic goals.
1. Micro economics in nature is to insure the Slovenes and financial soundness of all
intermediates in order to protect the stability of the countries payment system.
2. To provide consumer protect them against UN due risks of losses that may raises from
failures, frond or performance of institutions and markets and the proper working of
competitive a market forces. (Chave 1993)
3. To promote the defiant performance of institution and markets and the proper working
of competitive a market forces (chave 1993).
2.6. Minimum capitals required of new MFI entrants
According to MFI/01/96 in starts that MFI applying for a licenses shall have minimum
paid up capital of 200,000 birr. This is deliberated action of the government to improve
entry and growth microfinance industry, on the other hand as December 31, 2007 the two
largest MFIS DESCI and HCSI have mobilized 9,742,247 birr and 5,652,200 birr of
savings, respectively.

2.7. Micro finance targets

The regulation frame works has been quite related on the maximum of loan size that
MFIS can lend to an individual borrower, with a view of to accommodate clients who can
manager a loan specifically. The latest regulation state that MFIS can lend to an
individual borrower a loan size at least 0.5% their capital, with a precondition that the
total sum of money to this kind of lending not exceed some 20% of the preceding years
disbursements. This is helped greatly MFIS to accommodate the demands of successful
clients who needs high loan sizes.
Generally microfinance targets women. A basic premise is that economic participation is
foundation for other dements ions of empowerment the recent micro credit summit report
indicates that women constitute over 65% client in the industry globally. As employment
and traditional livelihood strategies for men disappear poor women in increasing numbers
have had to make their ways into then formal sector, primarily in low paying and often
manual works, vending, petty trading, agricultural labor, collecting garbage, cleaning
toilets and factory employment. In fact it is now believed that about 40% of the
household in Ethiopia are headed clearly MFIS vision is poverty all aviation and this can
never be attained without reaching women who suffer poverty (Williamicejonury 2004)

2.8. Small business

The definition of MSES varies from country to country. An over the world the numbers
of employees or capital investments or both used as bases for defining MSES.
On the bases of environment criteria the general acceptable divisions are enterprises
which employed up to 19 workers categorized under micro or very small enterprise.
Enterprise that employed 20-100 workers grouped under small enterprises and enterprises
which employed 101-500 workers grouped under medium enterprises (Hailly, 2003 p 21-
23).

2.9. Distinction between micro and small enterprises

General speaking no sharp distinction between micro and small enterprise is possible
many comparing system of classification suggested by different studies but there is a
slight distinction between them.

2.9.1. Small enterprise

The small enterprise category includes firms that operates in the formal markets are
registered can conclude contact raise loans and access to makeup date technology. As
opposed to cottage industry, small enterprise are employing modern techniques and
mechanized equipment to produce modern manufactured items. Furthermore small
enterprise have the following designed characteristics.
• They obtain raw materials (finish or finished) and manufactured goods from long
distance.
• The products of small enterprise sold either in nearest town or distant area in
which better market fund.
• They are employing 10-50 or workers in manifesting or modern product.

2.9.2. Micro very small enterprises

The cottage industries also known as traditional small industries are exercise on the
domestic by members of the households as part time or full time occupation.
 2.10. Common characteristics of micro and small enterprises
• Given various definition studies at both national and international levels suggest
the micro and small enterprise have the following common characteristics.
• The small business entrepreneur generally work and produce for local market.
• Personal selling or family money provides the primarily source of capital for
establishment.
• Small enterprise are to larger extent solely run by the owners themselves and
members of their family. In many cases part time workers are also involved.
• Small enterprise requires less capital invested in the form of fixed asset, plant and
machinery.
• Small enterprises fundamentally labor intensive with characterized by utilization
of available man powers.
• They involves of simple technology intensive utilization of individual skill
leading to professional specialization.
• They are flexible capable being adapted to changing tests and demand.

2.11. Contribution of small business to the economic development

Small business has the potential contribution in number of importance to the
development process. Among the most significant of these are the follow ways.
• Contribution of household income and welfare.
• Providing employment opportunities
• Contribution to self-confidence and employments for individuals by recognition
of the diversity of individual and spread of the vision.
• Contribute to social changes political stability and democracy.
• Through providing new opportunities for poor women rural and isolated
locations.
• Brings in the area of demographic changes (Enawgraw 2006).
 2.2. Empirical review
According to Allen and Gregory (2005) strongly suggested that worse lending
infrastructure may also reduce SME credit availability indirectly. This may occur if a
restrictive regulatory environment constraint the potential micro finance institution
structure preventing some types of micro finance institution from gaining sufficient
market share to capitalized on their comparative advantage in specific lending
technologies.
According to Rajan and zingales (1998) on line of inquiry point to micro finance and
their role in economizing in information costs.Rajan and zingales argued that well
develop financial market and institution help a firm to overcome proble of moral hazard
and adverse selection thus reducing the firm cost of raising money from out siders.
Researcher uses under this view, firm in less financial developed countries are likely to
exhibit lower level of firm investment because of financial constraints.
Consistent with this prediction severally studies financial development to be positively
related to the level of industry and firm growth rate. Bank appear to have in SME credit
availability in developing nations in addition, the government of a number of nation
maintain large market share of state owned micro finance institution with lending
subsidies and tax collection procedure.
Finance is the first empirical work on trade credit in Ethiopia it suggest a new venue to
channel fund to micro and small enterprise linking support to micro and small enterprise.
Supplier credit and bank lending (kangetal, 2000).
According to murduch and hashemi (2003) state micro finance is critical contextual
factor with strong important on the achievement MDGs micro finance is unique among
development intervention it can deliver social benefit on going. Permanent basis and
large scale referring to various case studies, they show how micro finance has played a
role in eradicating poverty, promoting education, improving health and improving
women.
According to markowski (2002) micro finance institution provide financial service to a
large number of low income person to improve their welfare and provide those financial
service in financial variable manner. It achieving profitability and strong social
performance is the ultimate promise of micro finance.
The aim of micro finance according to ofero (1999) is not just about providing poor to
combat poverty on an individual level. It also has role at individual level. It seeks to
create institution that deliver financial service sector to the poor who are continuously
ignored by the formal banking sector.
According to Robinson (2001) and ofero(1999) prior to them, from the 1950 through to
the 1970, the provision of financial service by donor or government was mainly in the
form of subsidized rural credit program. This often resulted in high loan default, high
loans and an in ability to reach rural household (Robinson, 2001)

2.3 RESEARCH GAP

As the literature show that numerous studies were conducted on the role of microfinance
institution in strengthening small and micro business enterprise by different researchers.
Diversification on the role of microfinance institution in strengthening small and micro
business enterprise of microfinance institution, profitability of microfinance institution
and on other topic in Ethiopia as a general. Still there are many knowledge gaps with
respect to role of microfinance institution in strengthening small and micro business
enterprise in Ethiopia, particularly in North Shewa Zone, Fitche town. To the best
knowledge of the researcher, few or no researches were conducted on the topic so far. .
 CHAPTER THREE

3. Methodology of the study

3.1. Research design
The study will be used descriptive research method for this study the major purpose of
descriptive research is to describe the state of affair situation as it exist. The study was
used primary data approach in the study means qualitative type. It helps for analyzing the
data that are collect by using various instrument of collecting data means of by interview
and questionnaire. Based on data which are relevant for study the researcher is uses
descriptive design to picture out the current role of the microfinance institution
(Lawrence, 2000)

3.2. Types of data and source

The study will be used two types of data i.e. quantitative and qualitative approach to
design the research without attempting to quantity their research through statically
summer or analysis but it provides more richness to the data. Quantitative approach is
measuring or counting and involves collecting, analyzing numerical data apply statistical
tests. The researcher has been used primary data source to achieve the objective of the
study. The primary sources has been obtained information from questionnaires and
through interview with manager and employees.

3.3. Method of data collection

In the data collection process different types of data collection method will be in the
study the primary data will be through unstructured interview and questionnaires. The
questionnaires include open and close ended questions.
3.4. Target population/ Target group
The researcher target population on the micro finance and small micro enterprise on the
role of micro finance institution in strengthening micro and small business enterprise in
the town of Fitche that the target population is 308. Among 308 total population in MF
and SME’s. 8 from micro finance institution employees and 300 from small and micro
enterprise.

3.5. Sampling size and techniques

The researcher will take 35 small micro enterprise and 4 micro finance institution from
total target population by using judgmental sampling method.
The reason behind the researcher will use judgmental sampling method is that a number
of small enterprises is very large and can refer the role micro finance institution in
strengthening micro and small business enterprise. The researcher will select 35 and 4
employees, because of cost and time constraints. It is impossible to collect data from
target population. In the study the researcher will use judgmental sampling methods
which is non-probability sampling technique and the researcher s choice this technique
because it permit the researcher to have complete freedom of selecting individual who
can provide relevant information when it comes to sampling process, it’s usually biased
since no randomization is used in obtaining the sample.

3.6. Method of data analyses

The researcher will use the statically tools to analyze the data which will be collected
from primary source of the data. The data which will be collected through primary data
collection method was analyzed through descriptive analysis which contains tabulation
and percentage.
 CHAPTEER FOUR

4.1 Time and Budget Plan

4.1.1 Time Plan

This study will be conducts within total of six weeks starting from the first week of Jan
for title selection up to the final presentation of the study march first week finding the
activity to be perform with in these four weeks and their associate time are as follows for
the year 2024 Jan 16 to 2024 march 7

Weeks

wee week wee wee week wee

2 5
No Activities k1 k3 k4 k6

1. Selection of research proposal title X

1 Literature review and proposal writing X

2 Development of questionnaire & interview X

guide

4 Move to study sites X

5 Preparation of respondents X

6 Primary and secondary collecting data X

7 Organizing and categorizing data X

8 Data editing and enter to computer X

9 Data analysis X

10 Writing first draft of the research paper X

11 Writing the final draft of the research paper X

12 Submission of the research X

13 Final paper Presentation X

4.1.2 Budgeted Cost

This part the proposal contains different types of expenditure that will be incurred in
conducting the study. The following table shows expenditure of item with their associate
cost

Item Unit Unit cost Total cost

Material Birr Birr

Pencil 2 unit 3 6
Pen 5 unit 12 60
Print 3 30 90
paper Half 1 pack 150 150
Transportation 3 times 10 60
Blinder 1 unit 35 35
Flash disk 1 200 200
601

Reference
EayesBekele: 2009 a lesson of success in micro finance in Africa: the experience of CSI
in Ethiopia
Karata (2007) outreach and financial performance analysis of micro finance institution
in Ethiopia. Africa economic conference Addis Abeba
Lidger wood (1999) sustainable banking with the poor micro finance hand book in
institutional and financial prospective the World Bank Washington,USA
Ministry of trade and industry (MOT) 1997 micro and small enterprise development
strategies. Addis Abeba, Ethiopia.
National bank of Ethiopia: www.nbe.gov.et/2007/2008- annual report governs speech
Peter kk: (2001) micro level institution and enterprise productivity in sights from small
business sector Nairobi,KENYA
Stieglitz 1990. Peer monitoring the credit market world bank economics,London,England
Chave,1993 Porformance of institution and market proper work of competitive market
Force,Moscow,Russia

APPENDIX
SELALE UNIVERSITY
FACULTY OF BUSINESS AND ECONOMICS
DEPARTMENT OF ACCOUNTING AND FINANCE

Research Questionnaire

General direction to Respondents

This questionnaires is designed to get information on the role of microfinance in
strengthening small micro enterprise in (Fitche town).

The main purpose is to obtain your options, thought and experience regarding the role of
microfinance institutions in strengthening small micro enterprise. The data would be used
to develop the research project aimed at fulfilling requirement of BA degree in
accounting and finance Selale university faculty of business and economics and to
ascertain the role of microfinance.

Please feel to respond to all the item. The information you provide would be kept
confidential and your rill not be responsible for the finding of the study. Writing your
name is not needed.

I thank you in advance for your cooperation and completion of form.

Part l, General questionnaire that is common for both microfinance and small micro
enterprise personnel.

• Sex; male Female

• Qualification; Diploma. Degree. Masters.

•Work experience ; <5 year. 6_10years. 11_15years. >16.

Part ll: - Questions to be conducted only with microfinance coordinator.

Instruction l. The following items are related with role of finance and other factors.
Please provide your answer to questions based on your service and experience.
• When your organization was established as microfinance in the Fitche town?
_____________________________________________________
 • Do you provide loan service?
________________________________________________________
• When your organization start loan provision this town? ___________________
• For whom do you provide loan? _______________________________________
• Do you organization has schedule for loan provision? _________________
• •How do you supervise the provide money after provision? __________________
• List out the technical support that you provide for SME organization.
__________________________________________________________________
__________________________________
• Are they effective in using the money?
_____________________________________________________________
• Do you provide training for SME? ____________________________________
• If "yes" how many times you provide the training in a year
__________________________________________________________________
________________________________________

Thank you for genuine cooperation.

Part lll: - Questionnaires to be filled only by the small micro enterprise managers.

Instruction 3: provide your own answer for the following questions based on your
experience as SMEs personal.

• When your organization

established? .....................................................................................
• From where did get
money?..........................................................................................
• Are you getting enough money? Yes…. No…

• If you answer for question three is "yes" how much money did you
get? .......................................................................................
• When your organization start to borrow
money?.........................................................................................
• From whom you borrow money? .............................................................................

• Are you supervised by the lender? Yes_ No_

• If answer for number seven (7) is "yes" how many time in a

week?..................................................................................
• Are you effective performing by the money you borrowed? Yes_ No_

• If your answer for number nine (9) write the effect that they provide for you
institution.
………………………………………………………………………........................
...................