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Ethiopian Micro-Finance Institutions and Commercial Banks

Savings and credits

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Guidelines for advisors to facilitate 
access to credit for micro and small enterprises

• The facilitator who deals with the operator often is confronted with operator's financial problems. In order to assess the real needs, it may be useful to get an overview of the situation of the enterprise concerned. What are the real causes for the "lack of finance"? The decisive matter of financing should be the market situation of the enterprises. If the operator meets problems in sales and clients, the facilitator should be hesitating to recommend credit activities. In general a micro or small enterprise with market problems may not be easily able to use the credit in a profitable manner. 

• If the entreprise meets a shortage in investment, equipment, raw materials or wants to extend his enterprise by a normal or good sales situation, credit measures may be considered.

• In that case a analysis of the business situation and an analysis of the business projects should be undertaken by writing a business plan. The business plan should be written by the operator himself assisted by the facilitator.

• At the same time the operator should be urged to open a savings account and to strengthen his savings. Because proper funds are a good condition for a succesful loan application procedure.

• Simultaneous to this preparations on operator's level, information on bank or micro-finance level should be obtained. What are the adapted finance institutions for this kind of business? What are the loan application conditions? Individual or group collataral? Ceiling? The interest rates? Repayment period and conditions? Grace period? 

• Finally, get the loan application form.

Examples of a business plan and a loan application form see library.

See also Business services: How to write a business plan

Have also a look on our finance institutions page

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