DETERMINANT OF ACCESS TO CREDIT FACILITY IN ETHIOPIA; A CASE STUDY IN SMALL AND MEDIUM SIZE ENTERPRISES IN SILTIE ZONE

Abstract This study's goal was to examine the determinants of credit access facility through a case study of small and medium-sized businesses in the siltie zone. SME’s are extremely important to the economy of every nation. They raise people's standard of living by creating jobs and benefiting both companies and employees. Since SMEs in the siltie zone are a significant source of innovative ideas and entrepreneurial abilities, the goal of this study was to determine what factors determine SMEs' access to credit facilities. In order to support enabling credit policies and other researchers, this study was meant to be extremely valuable to individual businesses, possible investors, lending institutions, and the county government of Ethiopia. The target population for this study were 316 SMEs operating in siltie zone. In order to pick respondents from the chosen stratus, the study first employed stratified random sampling. Of these, 145 respondents were chosen, and 123 respondents filled out and submitted the form correctly. Questionnaires were used to collect data. To ascertain the relationship between the identified parameters and credit accesses, correlation and multiple linear regression analyses were performed on the obtained data. Next, it was shown using graphs and tables. From the study, it was determined that the most important elements influencing the availability of credit facilities for SMEs in the siltie zone are the number of financial institutions, interest rates on loans, collateral security, literacy level, and firm characteristics. The researcher also recommends that the number of financial institutions can be increased by formation of saving and credit association for different categories to improve the level of financial expanding.