Departmental Bulletin Paper The Effect of Micro Finance Institutions in Growth and Development Small Business

Goto, Makoto  ,  Negash, Fiyori Afeworki

66 ( 2 )  , pp.67 - 90 , 2016-12-08 , 北海道大学大学院経済学研究科
This study has attempted to investigate the challenges that SMEs face in their efforts towards growth in Asmara, Eritrea. The study was conducted by selecting 145 SMEs, stratified into beneficiaries and non-beneficiaries of MFI. The findings have consolidated the conventionally accepted merits of MFI while at the same time making certain interesting new findings in the case of Eritrea. MFI has overwhelmingly increased the capital of the limited SMEs benefiting from loans. However, the number of female beneficiaries is less than desired. Also, the awareness about the existence of MFI is very low. A diversion of loans for other purposes has also been discovered. The study concludes that there is a need to increase the amount of credit made available on top of a reduction of interest rates. There has also been found to be a need to give more focus to training and awareness programs. SMEs involved in farming and other agricultural activities as well require more attention from MFI.

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