THE EFFECT OF INTEREST FREE BANKING ON ENTREPRENEURIAL PERFORMANCE IN CASE OF WERABE TOWN AMINISTRATION

Abstract With specific reference to commercial banks that now provide interest-free banking services, this study aims to empirically demonstrate the impact of interest-free banking on entrepreneurial performance in Werabe town. Both descriptive and explanatory research methods were used in the study. A systematic questionnaire was employed in the investigation. The data was analyzed using descriptive statistics of mean, frequency, and percentage using SPSS version 21 software, as well as inferential statistics (multiple linear regression and correlation) from a total of 1405 sample respondents obtained through multistage sampling, of which 312 were chosen from among entrepreneurs. The results demonstrated that entrepreneurs have benefited from interestfree banking services. The results also indicate that owners' given the current economic climate, government policies require consideration as they significantly impact the success of entrepreneurs. With some changes to laws and regulations, the Ethiopian government should be more proactive in promoting interest-free banking services. NBE should also set up a dedicated department to handle all matters pertaining to interest-free banking and keep a close eye on and oversee interest-free banking operations.