Factors Affecting Micro Finance Credit Use of Women Entrepreneurs: The Case of Sodo Zuria Woreda, Wolaita Zone, Southern, Regional State, Ethiopia

Abstract

Microfinance and credit for small and medium-sized enterprises, particularly for women are important for enhancing the social and economic impact on the woman. MFI can compensate for some of the weaknesses in capital markets and can help low-income woman entrepreneurs to improve their enterprises. The general objective of the study was to analyze factors affecting the amount of micro credit borrowing by women entrepreneurs in the study area of omo micro finance institution. A multistage sampling technique was employed to select 90 women entrepreneur borrowers from the omo micro finance institution. Both quantitative and qualitative data were collected from sampled rural women through interview. Both descriptive and econometric data analyses techniques were applied. The findings of this study showed that average amount of loan obtained by women borrowers was 4201.67 ETB in the area. The inferential statistics revealed that personal variables like age, family size and economic variables: monthly saving, annual income and collateral type were found to be significantly influencing the amount of women institutional borrowing in the study area .The study recommend that micro finance institutions to improve their service in terms of speedy release of loan, reducing interest rate from the existing 15 percent, accepting oily group  collateral and not insisting immovable collateral and encourage saving.

Keywords: Women entrepreneur, microcredit, Micro finance institution.

DOI: 10.7176/RJFA/10-15-04

Publication date: August 31^st 2019