Abstract
The objective of this study is to assess of credit provision of Sidama Micro Finance Institution. To this end, the researchers employed mixed research approach with descriptive research design in order to achieve the objective of the study. The primary data was collected through structured questionnaire. Then, descriptive analysis has been done through SPSS version 21. 0. Consequently, the result of this study concerning credit provision practices showed that Sidama Micro finance institutions have moderately good credit provision practice. Secondly, the findings of this study revealed that lack of client data base management system, weak monitoring system, weak risk analysis and controlling system, poor loan management and lack of early warning system were cause credit risk in Sidama micro finance institution. Finally, the researcher recommended the possible suggestions to Sidama zone micro Finance institutions to improve credit provision practice more than current position and mitigating cause of credit risk in order to improve institutional outreach and sustainability. This enables to enhance the profitability of Sidama micro finance institution and promote economic development of Ethiopia on other hand. Keywords : Credit Provision Practice, Credit Risk, Sidama Micro Finance, Sidama Regional state, Ethiopia DOI: 10.7176/RJFA/11-13-02 Publication date: July 31 st 2020
Highlights
1.1 Background of the Study The definition of Microfinance institutions proposed by some authors and organizations are seemingly different from one another
Research Design and Approach In this study, the researcher was employed descriptive study design to precede this specific study because the objective of this study is to describe the credit provision practice of Sidama Micro finance institutions
The researcher used the content validity index in order to check the validity of the questionnaire in current study and calculated as follow: The content validity index 0.75 of this study is greater than 0.70 minimum acceptable value
Summary
1.1 Background of the Study The definition of Microfinance institutions proposed by some authors and organizations are seemingly different from one another. According to [3] microfinance is a provision of a broad range of financial services such as savings, credit, insurance and payment services to the poor or low-income group who are excluded from the normal banking sectors. Microfinance covers the provision of a range of financial services to low income households, including loans, savings, money transfers and insurance [5] and [12]. Like Ethiopia, micro financing institutions (MFIs) emerged with unique opportunity to serve poor people who do not have access to commercial banks. Microfinance involves the provision of micro-credit, savings, and other services to the poor that are excluded by the commercial banks for collateral and other reasons. Sidama Microfinance one of them and operating in Southern Nations Nationalities Peoples Regional States
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