Enhancing Access to Finance for the Sustainable Development of Small Business Enterprises in Ethiopia

Abstract

This study investigates key determinants of access to finance among Small Business Enterprises (SBEs) in Ethiopia, emphasizing the role of market opportunity, financial literacy, financial recordkeeping, and institutional frameworks. Using binary logistic regression on data from 192 SBEs, the results show that opportunity to market (β= 3.630, sig < .001), financial literacy (β = 2.689, sig < .001), and financial recordkeeping (β = 5.663, sig < .001) have significant and positive effects on the likelihood of accessing finance. These findings highlight that SBEs with stronger market presence, better financial knowledge, and transparent business records are more likely to secure external funding. While institutional factors (β = –1.384, sig = .095) showed a negative association, the effect was not statistically significant. The study concludes that internal business competencies and market orientation are more influential than structural institutional factors in determining financial access and recommends targeted financial capacity-building and recordkeeping support for Ethiopian SBEs.