1. FACTORS CONSTRAINING THE GROWTH AND
SURVIVAL OF MICRO FINANCE IN DEBRE BIRHAN
SELECT CO
COLLEGE OF POSTGRADUATE
DEPARTMENT OF BUSINESS ADMINISTRATION
BY
FIKRU YETESHAWORK
ID.NO:- BCP/151/14
Adviser:- Bekele M. (PhD)
JUNE,2023
2. 1.Introduction
1.1 Back ground of the study
1.2 Statement of the problem
1.3 Objective of the study
1.4 Significance of the study
2.Methodology
3.Findings
4.Conclusions
5.Recommendations
3. Microfinance institutions (MFIs) provide financial services to poor clients in
most cases have no access to formal financial institutions.
During the last three decades, microfinance has captured the interest of both
academics and policymakers.
This is, among other things, due to the success of the industry (Assefa et al.,
2013).
Improving access to financial services is taken as an important development
tool because it helps in creating employment
INTRODUCTION
4. Cont’d
Growth and Survival reflect how MFIs are run given the environment in which
they operate, which should optimize efficiency, risk management capabilities,
competitive strategies, quality of their management, and levels of
capitalization.
there are no empirical studies conducted on the factors constraining the growth
and survival of Microfinance from perspectives of,
Managerial, political, financial, and low loan repayment factors on growth and
sustainability that incorporated forward and backward integration on
microfinance institutions in Debre Brehan Town.
5. The main motive that initiated the researcher to conduct this research the factors
constraining the growth and survival of microfinance have been under searched.
Literature accessed by the researcher focused on other aspects of microfinance
or developed countries’ practices and contexts.
Hence, there is a knowledge gap on how well the challenges and prospects of
employment performance management systems.
The studies use limited variables which focus on MFI-specific and
macroeconomic factors only and do not say anything about managerial,
political, financial, and loan repayment factors in their study.
Statement of The Problem
6. What is the effect of managerial factors on the growth and survival of
microfinance in Debre Brehan Town?
What are the effects of political factors on the growth and survival of
microfinance in Debre Brehan Town?
How the financial factors on growth and survival of microfinance in
Debre Brehan Town.
How loan repayment affects the growth and survival of microfinance in Debre
Brehan Town.
Research questions
7. General objectives
The general objective of the study is to investigate the factors constraining the growth and
survival of microfinance in Debre Brehan Town.
Specific objectives of the study
To analyze the effect of managerial factors on the growth and survival of microfinance in Debre Brehan
Town.
To identify the effect of political factors on the growth and survival of microfinance in Debre Brehan
Town.
To investigate the effect of financial factors on the growth and survival of microfinance in Debre Brehan
Town.
To examine loan repayment practice affects the growth and survival of microfinance in Debre Brehan
Objectives of The Study
8. The result of this study shows the current factor constraining the growth and
survival of microfinance which are help the institutions under study.
The gap in the subject area is one of the major factors that initiated the
researcher to conduct this study.
This study fills the information gap for the effect of, managerial, political,
financial, and low loan repayment factors in debre berhan town and,
Adds more information on the existing knowledge.
Significance of The Study
9. Geographically, the area of the study was delimited to Amhara Region with a
particular reference to Eight Debre Brhan microfinance institutions.
Conceptually, the scope of the study also focuses on the factors constraining
the growth and survival of microfinance in Debre Brehan Town
The study used quantitative research by using stratified sampling techniques.
The sample size was employees who are currently working in Debre Brhan
Town microfinance institutions.
Delimitation of The Study
10. Factor constraining Growth and
Survival of Microfinance
Political factor
Financial factor
Low loan repayment
Managerial factor
Conceptual Framework
Independent variable Dependent variable
11. Research Design
Hence from the nature of the study and the amount of population, the
research design that was implemented is more explanatory research.
To examine factors constraining the growth of microfinance under
the study, the researcher used descriptive research methods.
RESEARCH DESIGN AND
METHODOLOGY
12. In this study, the researcher used a quantitative research approach to
address the objective of the study and examine factors constraining the
growth of microfinance.
Quantitative research involves the collection of data so that
information can be quantified and subjected to statistical treatment in
order to help alternate claims (Creswell, 2011).
Research Approach
13. The population of the Study
A population is all people or items with the characteristics that one wishes to investigate
(Creswell, 2003).
To collect data about the factor constraining the growth of microfinance the researcher target
the employees of Debre Brehan Town microfinance.
The researcher targeted the 277 microfinance institutions employees.
Sampling Techniques and Sample Size
The main idea of sampling is that by choosing specific of fundamentals in a population,
conclusions could be drawn from the total population.
To meet the aim of the study, the researcher used a stratified sampling method from each
department as indicated.
Population, Sampling, and sample size
14. Sample Size
The researcher used Yamane’s (1967) formula to calculate thesample size.
𝒏 = 𝐍
𝟏+𝐍((𝒆))𝟐
Where:-
n-is the sample size,
N-is the population size, and
e- Is the level of precision or sampling error =
(0.05)
277/1+277(0.05)2 =164
16. Accordingly the study, was used a questionnaire data collection
technique to collect primary data.
Structured questionnaires were distributed to the specified
employees of Debre Brhan Town microfinance
17. Statistical Package for social science (SPSS) version 20 computer
software is used for analysis.
The statistics of the mean score and standard deviation were
employed to observe the distribution of observations,
degree of consistency, and similarity among respondent
responses under the study.
Methods of Data Analysis
18. Reliability
Reliability is the accuracy of an instrument. Measuring instrument reliability is critical
Cronbach's alpha is the most widely used test for determining an instrument's internal
consistency.
The researcher used Cronbach‟s alpha to measure the reliability of the scale.
The pilot test was used to measure the reliability of the research instrument by using
Cronbach‟s alpha before using the whole sample size.
All the scales are above the generally accepted lower limit of .70 Cronbach‟s alpha
coefficient, and therefore they have high levels of internal consistency.
Reliability and Validity Instruments
19. Validity
Validity entails governing whether the research accurately measures what it is
intended or measuring how truths full the research results are.
In the study the researcher addressed the research validity by, formulating
objective questions, the review of literature, and adopting instruments used in
the previous study to measure how truth full the research results.
Ethical consideration
The conclusion followed the principle of objectivity so that the researcher is
free from any bias manner. It is the other ethical consideration in research.
20. Results of Descriptive Statistics
The descriptive statistics discover to examine valid (N) observations, the
mean and standard deviation of the respondents in the investigation.
According to Zaidaton & Bagheri (2009), the mean score below 3.39 is
considered low,
a mean score from 3.40 up to 3.79 is considered moderate, and a mean score
above 3.8 is considered as high.
21. summary of Results of Descriptive Statistics
Descriptive Statistics
N Mean Std. Deviation
Managerial factor 160 3.5875 0.9546
Political factor 160 3.966 0.974
Financial factor 160 3.073 0.131
Low loan repayment 160 3.481 0.985
Growth and Survival 160 3.2604 1.0287
Valid N (listwise) 160
25. Model Summary
Model R R
Square
Adjusted
R Square
Std. Error
of the
Estimate
Durbin-
Watson
1 .856a .732 .725 .28097 .984
a. Predictors: (Constant), Loan Repayment factor, financial
factor, political factors, management factors.
b. Dependent Variable: Growth and Survival
Auto Correlation Test
27. Conclusions
Based on the findings of this study
The result shows that all the factors(management factors, political factors,
financial factors, loan repayment factors) have
A positive and significant on the growth and survival of the debre brehan
town microfinance institution.
The major findings of the study also show that 72.5% of the corresponding
change in determining growth and survival in debre brehan town
microfinance institution.
CONCLUSION, RECOMANDATION
28. Con't…
The results of the study pointed out that the political factor has statistically a
positive and significant effect on Growth and Survival of microfinance
institution in Dbre Brehan Town. Thus the microfinance institutions avoid
costly institution registration and licensing bureaucracy and political influence
in right working of institution to sustain the institutional growth.
29. Financial factor- has a significant and positive effect on the dependent variable
of Growth and Survival and it is found to be the determinant variable that
influences Growth and Survival of microfinance of Debre Brehan Town.
This study has identified the positive effect of loan repayment on the Growth
and Survival of microfinance of Debre Brehan Town. Loan repayment
practices positively affect the Growth and Survival of the microfinance
institution because of the Interest rate of MFIs are not fair to the poor, Lack of
willingness from clients to pay their loan, the institution do not follow-up the
repayment, lack of training and support for clients about loan repayment.
30. Cont.'s….
Generally, from the results of the employees’ process of performance management in CBE
in the Debre brhane branch with overall mean and standardization results in 3.81560 and
0.94054 respectively.
Therefore the overall mean value shows the process of performance management in cbe in
Debre brhan atse zerea yakob branch was high level.
CBE in Debre brhan atse zerea yakob branch has a very good process of performance
management.
In this regard most of the literature argued that standards should be clear to the manager as
well as the employee,
It should be clear -whether the standards is to be accomplished by the specific date.
31. Recommendations
Based on the findings and conclusions, the researcher forwards the following
recommendations.
Based on the findings, managerial factors strongly affects the growth and survival in the
study area.
Therefore, Debre Brehan Town microfinance institution should be improved the division
of duties and responsibilities among employees,
Lack of clear division of duties and responsibility among employees, facilitate well-
trained and experienced employees and develop excellent institution and effective
communication.
32. Political factor also positively affects the Growth and Survival of the institution. Thus,
the political factor of the institution shall reduce its political influence by further
strengthen the Growth and Survival.
Financial factor is found to be a determinant factor. Therefore, Debre Brehan Town
microfinance institutions should be improved the saving capacity of clients and the loan
collection system.
Loan repayment practice has a significant effect on the Growth and Survival of the
institution,
the loan repayment of the institution shall create a repayment schedule that is
comfortable to the clients and the institution facilitates training and support for clients
about loan repayment.
