Abstract:
Micro and Small Enterprises play a significant role in alleviating poverty in developing countries.
MSEs in Ethiopia provide employment opportunities and increase capital formation in the country.
But Access to finance is a major bottleneck for hampering MSEs from playing their constructive role
in the economy. The main objective of the study was assessing the challenges and prospects of micro
and small enterprises in accessing finance from ACSI. Data analysis was made through a
combination of both descriptive and inferential statistics to analyze the collected data in order to
generate full information about the issue under study the quantitative aspect of the study is based on
a survey of a randomly selected 163 MSEs owner/manager, shareholders and employee/manager.
Qualitative data collected from ACSI by the interview manager. The SPSS version 20.00 for
windows is used to process the primary data which is collected through questionnaires. The outcome
of a study reveals that firm characteristics, collateral requirement, cost of borrowing and awareness
of funding opportunity have a significant relationship with the access to finance and its availability.
These findings are expected to help both MSEs and financial source providers in the development of
appropriate strategies that contribute to growth of the nation as well as to the economy
