Determinants Of Growth Of Employees Savings And Credit Associations In Ethiopia The Case Of Addis Ababa University Ethio Telecom And Ethiopian Airlines Employees Savings And Credit Associations

Employees’ savings and credit associations (ESCAs) in Ethiopia have been investingrnover the years with the objective of maximizing their wealth. As is the case with allrninvestments, wealth maximization is a key objective whenever ESCAs have chosen anrninvestment avenue from a universe of possible investment vehicles. The failure to buildrnenough ESCAs’ wealth, through accumulation of institutional capital, is attributable tornweak financial stewardship, inappropriate capital structure and imprudent fundsrnallocation strategy. This study assessed financial practice as a determinant of the growthrnof employees’ savings and credit association with a view of improving the situation forrnsocio-economic development. This study used descriptive design and data was collectedrnfrom the respondents and financial records of the three ESCAs using a questionnaire andrndocument review tool, and analyzed using both descriptive and inferential statistics. Thernstudy findings indicated that growth of ESCAs depended on financial stewardship, capitalrnstructure and funds allocation strategy. The study recommends that ESCAs credit policiesrnshould be the one that would enhance the evaluation of loan applications; ESCAs shouldrnmake loan provisions to promote safety of funds, and apply optimum financing mix inrntheir capital structure

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