Abstract
The aim of this study was to assess the role of Equb in Micro and Small Business Enterprises finance in Konso. For this purpose, data was collected through questionnaire from Equb members as well as interviewing with Equb organizers and non Equb MSE owners. The respondents were selected using both proportionate stratified and random sampling techniques. Besides, the collected data were analyzed using descriptive narrations through concurrent triangulation strategy. The result revealed that, People joined Equb to dig up large amount of money, save and even get loans at the lowest interest. Banks/Micro Finance Institutions fail to cater for the saving and credit needs of poor and small business holders, mainly due to their lending terms and conditions of creating financial gap which informal financial institutions try to fill. In Konso, Equb dominates other sources in the finance establishment of Micro and Small Enterprises, expansion and their working capital finance, followed by personal saving, families and relatives.
Highlights
Micro and Small Enterprises (MSEs) enterprise development has been touted as one of the feasible means by which people who are not participating in the economy can enter it [1]
Individuals have devised many informal financial institutions typically Rotating Saving and Credit Association (RoSCA) as an alternative means to achieve saving and improve access to credit [3]
Rotating saving and credit association are informal saving and credit institution where individuals agree to meet for a defined period of time to jointly save and borrow money [4]
Summary
MSE enterprise development has been touted as one of the feasible means by which people who are not participating in the economy can enter it [1]. Many people in the rural areas engage themselves in micro and small business enterprises activities to make a living, but getting start up and working capital finance is the major obstacle for them [2]. Rotating saving and credit association are informal saving and credit institution where individuals agree to meet for a defined period of time to jointly save and borrow money [4] It is an indigenous financial institution in Africa known as Equb in Ethiopia, Susu in Ghana, Esusu in Nigeria, Chiperegani in Malawi, Mchezo in Tanzania, and Tontiniers in francophone countries [5]
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