Challenges and Prospects of the Ethiopian Microfinance Sector

Research Paper (postgraduate) from the year 2015 in the subject Economics - Finance, grade: Masters, Addis Ababa University (National bank of ethiopia), language: English, abstract: The primary objective of this paper was to identify the root causes of the problems and challenges faced by Ethiopian microfinance sector and to, subsequently, recommend remedial measures. In depth interviews have been used to identify and understand the problems and challenges faced by microfinance institutions. This study depicted that Primary cause for all problems is fund shortage and; in turn, the primary cause for fund shortage is insufficient start up equity capital. In addition, ownership structure is identified as supplementary cause of governance problems. Finally, it is recommended that solving these couple of problems is a must to overcome all challenges of the sector as taking measures on other problems is unlikely to provide long-lasting relief from the undesired effect.