Role of Financial Institutions in the Growth of Micro and Small Enterprises in Dire Dawa Administration

The objective of this study was to investigate the role of financial institutions on the growth of micro and small enterprises in Dire Dawa Administration. The specific objectives of this study were; to establish the role of financial institutions, MFIs’ saving services on the growth of MSEs in Dire Dawa Administration, to establish the role of financial institutions, MFIs’ loan services on the growth of MSEs in Dire Dawa Administration and to investigate the role of financial institutions, MFIs’ training services on the growth of MSEs in Dire Dawa Administration. These objectives sought to answer the following questions: what is the role of financial institutions, MFIs’ saving services on the growth of MSEs in Dire Dawa Administration? What is the role of financial institutions; MFIs’ loan services on the growth of MSEs in Dire Dawa Administration? and, what is the role of financial institutions, MFIs’ training services on the growth of MSEs in Dire Dawa Administration? The study adopted descriptive research design targeting a sample size of 245 MSEs. Primary data was collected using structure questionnaires while secondary data was collected from relevant literature. The study used self-administered questionnaires to collect primary data from the respondents. Data collected was analyzed both descriptively and statistically. Quantitative data was analyzed using descriptive statistics such as frequencies, modes, means and standard deviations. Likert type data was analyzed using mode as the focal point of discussion. Correlation and Linear regression test was conducted to determine the role of financial institutions, MFIs’ on the growth of MSEs in the study area. The study findings revealed financial institutions; MFIs’ saving and loan services have positively and significantly influenced the growth of MSEs in Dire Dawa Administration but the training services have not contributed positively. The study recommends there is need for MFIs and MSEs stakeholders to come up with measures of addressing the poor performing training component of MFIs services in Dire Dawa Administration, Ethiopia.