“In this paper, we analyze the financing gap of SMEs in Ethiopia and recommend ways of addressing the financing gap. Specifically, the study addresses a) the financing needs and financing options of SMEs in Ethiopia, b) Key constraints of SMEs access to finance, c) extent
of banks and MFIs involvement with SMEs, and the drivers and obstacles of SME bank
financing, and d) the impact of existing government policies and potential areas of government involvement. Unlike many previous studies that address either the demand side or the supply side limitations of access to finance this study synthesizes both the demand side and supply side constraints. The rest of the paper is organized as follows. Section 2 deals with literature review. Data
source and methodology is dealt in section 3. Section 4 investigates the issue of access to finance both from the demand and supply sides using descriptive statistics and econometric techniques, and section 5 concludes.”
