Assessing the Credit Provision Practice of Micro Finance Institutions: Evidence from Sidama Micro Finance Institution, Sidama Regional State, Ethiopia

Abstract

The objective of this study is to assess of credit provision of Sidama Micro Finance Institution. To this end, the researchers employed mixed research approach with descriptive research design in order to achieve the objective of the study. The primary data was collected through structured questionnaire. Then, descriptive analysis has been done through SPSS version 21. 0. Consequently, the result of this study concerning credit provision practices showed that Sidama Micro finance institutions have moderately good credit provision practice. Secondly, the findings of this study revealed that lack of client data base management system, weak monitoring system, weak risk analysis and controlling system, poor loan management and lack of early warning system were cause credit risk in Sidama micro finance institution. Finally, the researcher recommended the possible suggestions to Sidama zone micro Finance institutions to improve credit provision practice more than current position and mitigating cause of credit risk in order to improve institutional outreach and sustainability. This enables to enhance the profitability of Sidama micro finance institution and promote economic development of Ethiopia on other hand.

Keywords: Credit Provision Practice, Credit Risk, Sidama Micro Finance, Sidama Regional state, Ethiopia

DOI: 10.7176/RJFA/11-13-02

Publication date:July 31^st 2020