College of Business and Economics

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    DETERMINANT FACTORS OF SUCCESS OF SAVING AND CREDIT COOPERATIVES IN TIGRAY
    (Mekelle University, 2025-11-25) TESFAHUNEGN GUESH ABAY
    Savings and Credit Cooperative Organizations (SACCOs) are key to promoting financial inclusion and socio-economic growth, particularly in regions with low exposure to formal banking. While SACCOs are registered in the Tigray region of Ethiopia, most of them fail to achieve sustainable success. This study assesses the determinants of the success of SACCOs in Tigray, with a specific emphasis on governance, technological adoption, and financial management practices. The study adopted a cross-sectional research design, and quantitative data were collected using a structured questionnaire from 257 officers, managers, and board members of selected urban SACCOs. Descriptive statistics and binary logistic regression were used to analyze data and determine factors that were significantly linked with SACCO success as measured by loan repayment rates, membership growth, and savings mobilization. The findings indicate that SACCOs in Tigray are staffed by a highly educated workforce, implying high human capital potential. The regression model identified four statistically significant determinants of success: Work experience (AOR = 00.211, p<0.030), Governance Effectiveness (AOR = 0.115, p < 0.001), the Impact of Technology Adoption (p = 0.002), and Dividend Payment (AOR = 5.430, p = 0.022). SACCOs with very strong governance, experienced employees, and those that paid dividends were significantly more likely to be successful, while a moderate (as opposed to high) technological impact was negatively associated with success. Operationally, speedy loan processing was the principal membership growth driver, overshadowing traditional drivers like low-interest rates. A fundamental "governance paradox" was observed, whereby formal arrangements like regular board meetings exist alongside a grave deficiency in board member training. The study concludes that SACCO success in Tigray is multifaceted, premised on the effective alignment of robust governance, deep (not moderate) technological integration, and strategic financial practices like dividend distribution. It recommends that SACCOs invest in board capacity through continuous training, in core banking and mobile technologies, and formalize financial strategies. Policy recommendations are that policymakers establish a tiered regulatory framework and facilitate technology adoption. This research provides valuable empirical lessons for enhancing SACCO performance and sustainability in Tigray and similar settings.
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    The Impact of Tax Incentives on Foreign Direct Investment in Ethiopia
    (Mekelle University, 2025-10-24) Hilawe Seyfe
    This study critically evaluates the efficiency and impact of tax incentives on attracting and retaining Foreign Direct Investment (FDI) in Ethiopia, addressing the central policy assumption that generous fiscal concessions, such as tax holidays and customs duty exemptions, constitute the primary mechanism for securing global investment capital. Given the potential cost to public revenue, this research was designed to provide empirical evidence on the cost-effectiveness and sustainability of the current incentive system. The methodology utilized a analysis of two decades of FDI flow data to establish macro-level correlations, which was then critically complemented by a comprehensive qualitative survey of over 28 foreign investors and senior management across key manufacturing and service sectors in Ethiopia. The survey specifically focused on ranking investment criteria, contrasting the perceived value of tax breaks versus the essential stability of the operating environment, infrastructure quality, and efficient bureaucratic processes. The findings conclusively reveal that while fiscal incentives successfully reduce entry barriers and secure initial commitments, their influence is quickly eclipsed by non-fiscal factors; long-term investment decisions, capital retention, and reinvestment are overwhelmingly driven by political predictability, minimized regulatory friction, and efficient access to Ethiopia's burgeoning domestic and regional markets. Crucially, the analysis identifies a systemic inefficiency where the current generalized incentive system, being largely untargeted and sector-agnostic, results in significant public revenue leakage without a corresponding proportional increase in high-quality, export-oriented FDI. Recommendation: Consequently, the paper concludes that the current policy is suboptimal for maximizing national development goals, advocating for a fundamental shift away from generalized tax holidays towards a strategic, performance-based incentive framework linked to measurable metrics like export volume and technology transfer, which must be immediately coupled with urgent policy action to enhance core institutional factors and infrastructural capacity to improve Ethiopia’s overall investment climate.
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    The nexus between energy poverty and food poverty: Empirical evidence within Wereda Laelay Maychew Central Zone of Tigray region
    (Mekelle University, 2025-09-23) Zemichael G/yohans
    This study rigorously quantifies the causal effect of household energy poverty on the severity of food insecurity in Wereda Laelay Maychew, Central Zone of Tigray, addressing the critical methodological challenge of endogeneity present in previous correlation-based studies. The research employed a two-stage Control Function Approach (CFA), using geographic distance to the electricity grid as a valid instrumental variable. This allowed for unconfounded estimation of the impact on the Household Food Insecurity Access Score (HFIA_Score_27), a continuous count variable, via a corrected Poisson regression model. The formal endogeneity test conclusively validated the necessity of the CFA correction (P<0.001). The corrected estimates established a robust, positive, and highly significant causal relationship. Specifically, the Average Marginal Effect (AME) revealed that being classified as energy poor causes the expected HFIA_Score_27 to increase by an average of 15.72 units (P<0.001). This strong quantitative evidence moves beyond mere association, establishing energy poverty as a fundamental structural determinant that significantly compromises food security. The findings necessitate an integrated policy framework prioritizing substantial investment in clean, affordable household energy access as an essential strategy for sustainable reductions in food insecurity.
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    Specialization: (Development Policy Analysis) A Research on Household Economic (Income, Expenditure, and Welfare) Impacts of Dairy Farming in Adwa City, central Zone, Tigray Region,
    (Mekelle University, 2025-09-25) Hager Takele
    This study investigates the household economic (income, expenditure, and welfare) impacts of dairy farming in Adwa City, Central Zone, Tigray Region, Ethiopia. Using a mixed-methods design, both quantitative and qualitative data were collected through household surveys, focus group discussions (FGDs), and key informant interviews (KIIs). A stratified random sampling technique was employed to select 370 respondents, comprising 115 dairy-farming and 250 non-dairy households, along with 5 key informants. Quantitative data were analyzed using Propensity Score Matching (PSM) and quantile regression, while qualitative data were examined through thematic analysis. The findings reveal that dairy farming significantly enhances household income, increases expenditure on education and healthcare, and improves dietary diversity and nutritional outcomes. These benefits are particularly notable among low-income households, indicating the pro-poor potential of dairy-based livelihoods. However, the study also identifies structural challenges such as limited access to quality feed, veterinary services, and market infrastructure. It concludes that strengthening institutional support, promoting gender-responsive programs, and investing in value addition are essential to maximize the contribution of dairy farming to sustainable household welfare and post-conflict economic recovery in Adwa and similar settings.
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    Factors Affecting Growth of Micro and Small Enterprises: The Case of Enticho Town
    (Mekelle University, 2025-11-25) Etenesh Yeabyo
    This study examines the internal and external determinants influencing the growth and sustainability of Micro and Small Enterprises (MSEs) in Enticho Town, Tigray, Ethiopia. Although MSEs play a central role in job creation, income generation, and structural transformation, their growth remains constrained by multiple financial, infrastructural, and institutional factors. Using quantitative cross-sectional research design, primary data was collected from 155 MSE operators across manufacturing, trade, service, construction, and urban agriculture sectors. The data were analyzed using descriptive statistics, correlation analysis, and multiple linear regression to identify the most significant predictors of enterprise growth. The findings reveal that infrastructure quality, workplace conditions, internal managerial capacity, and marketing capability are key positive contributors to MSE growth. Financial constraints and governance related challenges, including complex regulations, taxation burdens, and administrative inefficiencies negatively affect performance and limit expansion. The regression model explained a substantial proportion of the variation in MSE growth, underscoring the combined effect of internal competencies and external enabling conditions. The study concludes that sustainable MSE development requires integrated interventions that address financial access, infrastructure, capacity building, and institutional reforms. Improving access to credit, investing in enabling infrastructure, strengthening entrepreneurial and managerial skills, and enhancing transparent governance are essential for fostering a supportive business ecosystem. The findings provide important insights for policymakers, local administrators, development partners, and practitioners involved in promoting inclusive economic growth.
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    The Impact of Access to Microfinance Credit on Multidimensional Poverty Index (MPI) Reduction Among Female-Headed Households in Wukro Town, Eastern Zone, Tigray Region, Ethiopia
    (Mekelle University, 2025-11-25) Fasil Adane
    This study examines the impact of access to microfinance credit on multidimensional poverty (MPI) among female-headed households in Wukro Town, Tigray Region, Ethiopia. Employing a mixed-method approach that combines quantitative household surveys with qualitative interviews, the research investigates how microfinance influences income, education, health, and overall living standards. The findings indicate that microfinance significantly reduces multidimensional poverty by enabling women to start or expand small businesses, support children’s education, and access basic healthcare and food. However, microfinance alone does not fully address the deeper challenges in post-conflict settings; many households continue to face psychosocial stress, limited social inclusion, and unstable income due to market fluctuations. These results align with the multidimensional poverty frameworks of (Sen, 1999) and (Alkire, 2015), emphasizing the need to integrate financial services with social, psychological, and community support. The study concludes that while microfinance is a critical tool for economic empowerment, its long-term effectiveness in reducing MPI in conflict-affected areas requires complementary interventions such as mental health support, gender-sensitive programming, and broader post-conflict rehabilitation.
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    An ASSESSEMENT OF OPPORTUNITIES AND CHALLENEGES IN GOODS TRANSPORTATION: A CASE STUDY OF MEKELLE DRY PORT
    (Mekelle University, 2025-08-28) NIGUS AREFE GEBREMEDHIN
    Ethiopia, as a landlocked country, faces significant logistics and transportation challenges due to limited infrastructure, high freight costs, and overreliance on the Port of Djibouti. Mekelle Dry Port (MDP) was established to mitigate these issues and support regional trade through improved inland cargo handling. This study applies a port performance assessment framework to evaluate MDP based on five key objectives: assessing infrastructure and equipment, evaluating customs procedures, analyzing operational bottlenecks, examining workforce capacity, and identifying opportunities for improvement. Using a mixed-methods design, the study collected data from 210 structured surveys, 11 key informant interviews, and direct field observations. Results reveal that 77.6% of respondents were dissatisfied with storage facilities and manual cargo handling systems, while only 18.1% agreed on timely customs clearance, despite 58.1% recognizing benefits from digital systems. Operational inefficiencies were also highlighted, with 89.1% reporting delays in loading and unloading, and 87.1% citing critical skill gaps among the workforce. Furthermore, 96.6% of participants emphasized the urgent need for staff training. The findings demonstrate interconnected challenges involving outdated infrastructure (70% dissatisfaction), bureaucratic customs delays (42.4%), and human resource constraints. The study concludes that MDP requires targeted interventions such as infrastructure upgrades, digitalization of customs processes, improved layout and workflow design, and workforce development. These insights provide a valuable evidence base for policy action and contribute to broader efforts to modernize dry port operations in Ethiopia and other landlocked developing countries.
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    Assess the effect of Conflict on Performance of Rural Saving and Credit Cooperative and Mitigating Mechanisms in Southern Tigray: The Case of Endamohoni Wereda.
    (Mekelle University, 2025-03) YohannesRedae
    he survey conducted after the devastating war in Tigray provides valuable insights in to assess the effects on the Endamohoni Wereda Main objective of this study is to assess the effect of conflict on rural saving and credit cooperative in southern Tigray: in the case of Endamohoni Wereda. The effectiveness of RUSSCO is necessarily subject to assess the negative effects of the conflicts or war, especially as their loans outstanding depended on the level of savings outstanding. Endamohoni Wereda Youth Saving and Credit Cooperative for its saving, loan provided, credit collections in 2020 and this effect leads for above 2million birr pillages in all branches During the conflict, deposits shrink and increases in withdrawals, substantial decrease in loan repayment lost their businesses, or even died. The Research design is mixed methods both qualitative and quantitative approach has been employed in this study. This researcher used a descriptive research design, and systematic random sampling techniques, department heads were selected purposefully . Data were collected by interviewing up on 378 respondents in rural saving and credit cooperatives Endamohoni Wereda , South Tigray in Ethiopia. To analysis and interpret data the researcher used descriptive statistics such as the percentage, range, table, graphs, ratio and narrations and the other methods to collect qualitative data by interview systematic random sampling and purposive sampling .The post war conflict brought about complex effects and wide range of damages such as pillage, assets set on fire , shutter or demolished assets. The members are facing multiple problems, challenges and economic limitations. Major challenges of rural saving and credit cooperative union is lake of awareness, limitation of managerial capacity, limited income of the members, Sacco size, dependency or government interference, inadequate support and weak regulation and supervision ,inaccessibility to technology, political instability or war. From this it is possible to conclude that the post war conflict significantly disrupted the income capacity of most respondents, with only a small percentage managing to generate income at or near their expected levels. Similarly, the majority of members either ceased saving or reduced their saving amounts during the war and siege period. Solutions for the challenges of rural saving and credit cooperative, the researcher recommended the following suggestions. Increase educated staff members, use of technology, creating awareness rising, enhancing of the members, and their income per participant, being mautonomous, and cooperative among cooperative unions