Assessment Of Factors Affects The Savings Of Micro And Small Enterprises In Addis Ababa The Case Of Kirkos Sub City Trade Micro-enterprinuers

The study determined assessed thefactors that affects the saving of micro enterprises in Addis Ababa: the case of Kirkos sub city trade micro-enterprinuers. A multistage cluster sampling technique was used to select 341 respondents for the study and questionnaire was used to elicit information from the respondents. Descriptive statistics and probit regression were used to analyze the data. From total sample of 341 micro and small enterprises 51.9 %( 177) of them are 31-35 age this is indication of a relatively they are youths .The result of probit regression shows a negative relationship between the income of respondents and their participation in financial institutions. This because, in these case respondents are merchants (business men) they prefer to work with the money rather than saving at financial institutions. The main financial constraints that affect performance of MSEs to participate in formal financial institutions were high interest rate on loanand high collateral requirement asked by financial institutions. The study recommends that,in order to facilitate access to credit for MSEs, (financial institutions) banks and MFIs make adjustments in interest rate, affordable collateral values as well as need to allocate a certain portion of their loanable funds for MSE entrepreneurs and expand their branches around to increase their accessibility.

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