Assessment of the Contribution of Microfinance to Entrepreneurship Development in MOGADISHU

Abstract

Delivery of microfinance services to operators of small and medium enterprises (SMEs) is increasingly being
viewed as a strategic means of assisting growth and development. The purpose of this study was to assess the
contribution of microfinance to entrepreneurship development in Mogadishu. Survey research design was adopted
and Primary data was collected by using questionnaires. This research study used purposive sampling method to
select 120 respondents; but 108 were found usable and analyzed. The data was analyzed using descriptive statistics.
This study found the access of microfinance services to the SMEs is poor. This study also found due to the collateral,
short term repayment challenges, small and medium businesses are difficult to access loan from microfinance
institutions which hinder their entrepreneurship development. In addition to these, this study found that the
Microfinance institutions play significance role to the growth and sustainable development of SMEs and also
increases the productivity and profitability of small and medium enterprises. This study recommends the guidelines
of microfinance institutions to finance SMEs needs to be flexible and microfinance institutions should give technical
assistant to the SME to ensure success in the SME sector. The study also suggests access of microfinance services to
the SMEs should be facilitated and awareness to microfinance purposes and activities should be created.