ACCESS TO FINANCE AND ITS CHALLENGE FOR SMALL AND MEDIUM ENTERPRISES (SMEs) IN HALABA ZONE, CENTRAL ETHIOPIAN REGION

ABSTRACT<br> This study was conducted to investigate access to finance and its challenge for small and medium enterprises (SMEs) in Halaba Zone, Central Ethiopian Regional State. To address the objectives of the study, the study was utilized explanatory research design. This study was targeted 420 small and Medium Enterprises in Halaba Zone. The stratified sampling technique was employed for this investigation. Primary data and secondary were utilized to achieve the study's objective. In addition, both descriptive and inferential statistics was employed. In order to now the relationship between dependent variable and independent variables, the study was employed binary logistic regression model. Binary logistic regression model result showed that, independent variables such as collateral requirements, age of firm, business plan, educational status of managers, and lending procedure were significant variables which affect access to finance. To enhance access to finance for small and medium enterprises (SMEs), it is essential to prioritize initiatives that improve the educational status of managers through targeted training programs, fostering financial literacy and business management skills. Additionally, financial institutions should consider revising collateral requirements to include alternative assets and innovative financing options. Finally, rearrangement of lending procedures through digital platforms and simplified application processes can significantly improve accessibility.