TO ASSESS PERFORMANCE OF AMARA CREDIT AND SAVING

INSTITUTIONS IN FELGE BIRHAN BRANCH

PRACTICAL ATTACHMENT REPORT

BY:

Belachew Adugnaw

MARCH 2021
BURIE, ETHIOPI
 DEBRE MARKOS UNIVERSITY BURIE CAMPUS
DEPARTMENT OF AGRI BUSINESS AND VALUE CHAIN
MANAGEMENT
TO ASSESS PERFORMANCE OF AMARA CREDIT AND SAVING
INSTITUTIONS IN FELGE BIRHAN BRANCH

PRACTICAL ATTACHMENT REPORT SUBMITTED TO DEPARTMENT

OF AGRI BUSINESS AND VALUE CHAIN MANAGEMENT IN
PARTIAL FULFILLMENT OF THE COURSE PRACTICAL
ATTACHMENT

BY: Belachew Adugnaw

ID NO. : AGR/813/10

ADVISOR : Chernet W.( MSC)

MARCH 2021
BURIE, ETHIOPIA
 ACKNOWLEDGEMENT
Above all I would like to thank God for all things, who keep me on track. Next to this I would
like to thank my family whose support me by different things like money, giving advice on my
work. In addition to this, I would like to thanks Mr Getachew Mesfen,the manager of ACSI in
felege birhan branch and all members of the office employee's as well. I would also remain
thanks to my bloved Friends kindye Getachew for his patent motivation and support throughout
the study period and always behind me. Finally I would also like to thank my advisor Chernet W.
for his earnest and constructive elements.

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 ABBREVIATIONS AND ACRONYMES

ADLI Agricultural Development Led to Industrialization

CSA Central Statistical Agency

MASL Meter Above sea Level MFIS Micro Finance Institutions

MSE Micro and Small Enterprise

ACSI Amhara credit and saving Institutions

PRSP Poverty Reduction Stratagy Paper

SAP Structural Adjustment Prog

SWOT strength ,weaknes, opportunities ,threat

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 Table of Contents

Contents
ACKNOWLEDGEMENT.................................................................................................................................1

Table of Contents........................................................................................................................................3

LIST OF TABLE..............................................................................................................................................3

1 INTRODUCTION........................................................................................................................................6

1.1 Back ground of the organization........................................................................................................6

1.1.1 Vision of the organization...........................................................................................................7

1.1.2 Mission of the organization........................................................................................................7

1.1.3 Value of the organization............................................................................................................7

1.1.4 Objectives of the organisation.....................................................................................................8

1.2 objectives of the practical attachment.............................................................................................8

1.2.1 General objective........................................................................................................................8

1.2.2 specific objective........................................................................................................................8

2 LITRATURE REVIEW...................................................................................................................................9

2.1 Concept and definitions.....................................................................................................................9

3 . METHODOLOGY....................................................................................................................................10

3.1 Location (description) of the attachment area...............................................................................10

3.2 Sources and Method of data collection.........................................................................................10

4. DATA PRESENTATIONS AND DISCUSSION..............................................................................................11

4.1 demographic characteristics of respondents...................................................................................11

4.2 POTENTIAL OF PRACTICAL ATTACHMENT........................................................................................12

4.3 CHALLENGES OF PRACTICAL ATTACHMENT.....................................................................................12

4.4 SOWT analysis.................................................................................................................................12

4.5 Structure of the organization...........................................................................................................15

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5. SUMMARY, CONCLUSION AND RECOMMENDATIONS..........................................................................16

5.1 SUMARRY AND CONCLUSION..........................................................................................................16

ACSI is one of the largest MFIS in Ethiopia. The ACSI was established in 1995 according to the Ethiopian
commercial code and has been operating in Amara national regional state which is also the largest and
most populous regional state in Ethiopia..................................................................................................16

5.2 Recommendations..........................................................................................................................17

6. REFERENCES..........................................................................................................................................18

LIST OF TABLE

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Table 1 :marital status of sampled respondents..........................................................................................12

Table 2:money disbursed based on MSEs 2008-2010...............................................................................12

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 ABSTRACT
The major case of low economic growth and high incidence of poverty, in Ethiopia include lack
of income, low employment opportunities, education, health and etc. This study was conducted
with the potential performance and challenges of rural saving and credit services management.
Amhara credit and saving institutions (ACSI) make an effort to strengthen its financial capacity
in order to increase the amount of loan it disbursed for each client. Both primary and secondary
data were used for this study primary data were collected from sample respondents through
interview. The federal and regional government should assist the rural saving and credit
through give training sharing information about saving and credit services management.The
federal and regional government should assist the rural saving and credit through give training
sharing information about saving and credit services management. The members of the study
area should also attend properly the information given by the manager.

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 1 INTRODUCTION

1.1 Back ground of the organization

The prevalence of poverty has been common phenomenon in Ethiopia. The prevailing
operational of the conventional financial institutions ,in Ethiopia is in efficient providing
financial services to the poor people who live in rural areas.The challenge racing to day to reduce
poverty and to achieve sustained economic growth for development in rural development(ACSI
2004).

The Ethiopian government has taken policy measures such as Structural Adjustment program
(SAP),Agricultural Development Led to Industrialization (ADLI),and Poverty Reduction
Stratagy Paper (PRSP)currently increasing the poor access to microfinance service is accepted
one of the tool to attack poverty.ACSI is one of the largest MFIS in Ethiopia. The ACSI was
established in 1995 according to the Ethiopian commercial code and has been operating in
Amhara national regional state which is also the largest and most populous regional state in
Ethiopia. ACSI is devoted to alleviation poverty and encourage entrepreneurship through micro
credit and saving. It provides small, low cost loans to poor people and encourage them to
develop saving and credit habit in the rural population (ACSI 2004).

It is dedicated to improve poverty and encourage entrepreneurship through credit and saving and
service the rural population by giving money with less interest. To provide need based micro
financial services to strieghten the economic base of the low income rural people in study area
through increased access to sustainable and cost efficient financial services (ACSI, 2004).

According to ACSI (2004) the district area provides small loans to low income individuals and
unemployed citizens mostly for income generating activities in the study area. Micro and small
enterprise use the loans to their small business that focuses on production of construction
materials, wood and metal products and animals Fattening poultry and other businesses
anictivities. In addition to lending money, it offers training and industry the challenges of rural
saving and credit services management to their clients. The study area has been providing
services to clients and these services have been bearing fruits to allevaite poverty through
improving the sources of revenue the low income people by giving saving and credit services.

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Because of the life style of money clients has been change through these service, credit and
saving by the study area.

1.1.1 Vision of the organization

ACSI aspires to see the people of the region librated from grips of the object poverty with all the
power determing their future in theirowns hands and to ensure its inspiration.

1.1.2 Mission of the organization

It is improving the economic situation of low income productivity in the region. Primary through
increased to access ending and saving service. It will mantaine cost efficientness in service
delivery and integrated its activities with government and nongovernmental organisation
working toward achieving food security and poverty alleviation in the region.

1.1.3 Value of the organization

A. The general value of ACSI includes:

 Attiring significant out reach and financial self sufficient.

 Transparency
 Commitment to serve the client
 Commitment to the financial discipline.
 Good governance
 Consistency
 Enhancing women participation.

B. Individual values
 Hard working and competences
 Trust worthiness
 Produces
 Good personality
 Locality
 Confidentiality
 Accountability
 Team work sprit
 Impartiality
 Continues improvement.

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 1.1.4 Objectives of the organisation
 Review the delivery of financial services to the poor people in Ethiopia.
 Involve the opportunity for the product development.
 Identify the critical problem in new product.
 ACSI major source of loan for commercial bank.
 Non government organizations which are involved in the delivery of financial services.
 For giving project
 For used to semi formal institution iqub, ider, mailer etc.
 To know amount of receivable in the period of time.

1.2 objectives of the practical attachment

1.2.1 General objective

The general objectives of the practical attachment is to assess the performance, potential and
challenges of saving and credit services management of energy in amhara region east gojjam
zone enareg enawega wereda felege birhan town.

1.2.2 Specific objective

 To assess the existing potential and challenges of ACSI in felege birhan branch in the
study area.
 To the performance of rural saving and credit services management in the study area.
 To assess the SWOT of the saving and credit services

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 2 LITRATURE REVIEW

2.1 Concept and definitions

ACSI gives the opportunity for low income people to become self-sufficient by providing means
of saving money, borrowing money and insurance.ACSI is registered licensed microfinance
institutions operating in Amhara national regional state. It was initiated in January 1995 as a
project under Amhara self Help Organizations (ASHO)with the name of ACSI. Operation under
the mandate of the mother of the organization. ACSI was established based on the commercial
code of Ethiopia. The establishment of ACSI has been assisting poor people who have no access
to financial services and has contributed to the national development.ACSI encourage poor and
rural farmers from agricultural to Industrialization policy. ACSI defined as access to financial
products and services in such away that they are suitable for clients need with affordable cost.
Financial inclusion also presupposes how the service delivery channels are to clients. It is access
to services including credit, saving, insurance, payments and remittance. ACSI document source
(2008) Credit is purchasing power not derived from income but created by financial institutions
either as an offset to idle income held by depositions in the bank and as a net addition to the total
amount of purchasing power. Credit is contractual agreement in which a borrower receives
something of value now and agrees to pay the lender at some data in the future, generally with
interest. Method of saving includes putting money inside in banker person plan. Saving includes
reducing expenditure, such as recurring cost in terms of personal finance saving specifies low
right preservation of money as in deposit account versus investment( ACSI ,2010).

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 3. METHODOLOGY

3.1 Location (description) of the attachment area

The study area, Enarg Enawiga woreda in felge birhan is found in Amhara national regional
States (ANRS) is the largest institutions.Enarg Enawiga woreda is one of 14 woreda of East
Gojjam of Amhara national regional state and the administration center of Enarg Enawega
woreda in felege birhan town. The worda capital town Enarg Enawega is 85 from the zone
capital city debre markos. felege birhan is bordered on the south gindewen on the north by
debrework,on the west Estie and in the east melitolemaryam. The agroecology of felege birhan is
mid highland which accounts about 29.3% and high land which account 42.3% and low land
28%.The major economic activities in felege birhan in includes farming(crop production and
animal raring).Crop growth in the felege birhan area are Teff,Wheat,barely,beans,and oil crops.
Most of farmers also growth teff as a source of income. Some farmers also grow vegetable such
as potatoes, tomato,cabbage especially high land areas of the district. In addition livestock
production is an integral part of production system in felege birhan district.Regarding land use
patterns of 40.3% of the land area is used for cultivation 18.81 for grazing and the remaining is
forest, bush etc.ACSI which is provided its services largest to the rural population and transfer
money from one branch to another branch the the same the bank is.

3.2 Sources and Method of data collection

According to my practical attachment source of data was conclude to collect data for different
sources. Those are primarily and secondary data. primary data was collected by observation and
by interview of employee's or manager of ACSI in felege birhan branch and prepare the and
distribute all the workers are collect the primary data. secondary data collected from annual
report of the organization and other published materials.

3.3 Sampling techniques

3.4 Data analysis

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 4. DATA PRESENTATIONS AND DISCUSSION

4.1 demographic characteristics of respondents

Table 1 :marital status of sampled respondents.

No Status No of person Respondents Total

1 Single 2 2 4

2 Married 2 1 3

3 Divorced 2 0 2

Total 6 3 9

source own survey results

Table 2:money disbursed based on MSEs 2008-2010

No Name of Working Interest Male Female Total Activities

clients capital rate of their
doing
1 alemitu 19000 10 20 15 35 Fattening
2 Tamiru 20000 10 25 15 40 Farming
land
3 Habtamu 16000 10 12 4 16 Honey
production
4 Ashebr 17000 10 14 6 20 Poultry
products
5 demelash 20000 10 20 17 37 Grain
merchants
6 Tadesse 25000 10 39 11 50 Butter
merchants
7 amare 16000 10 25 10 35 Fishering
Total 1593000 155 78 233
Source from Felege Birhan branch of ACSI.

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4.2 POTENTIAL OF THE ORGANIZATION
 Develop to give quality service to customers

 to communicate with employees and clients of the organization harmoniously

 Develop speaking skill in front of the audience

 Develop being punctuality

4.3 CHALLENGES OF THE ORGANIZATION

 The main challenge was shortage of finance-the university was not fund for practical attachment

 The employees of the organization was not voluntary to give adequate information

 There was no adequate transportation service can`t reach on time

 the attachment was work on the time of vacation my family was not voluntary

 because the organization is far from my home

4.4 SOWT analysis of the organization

Strength
 ACSI provide advice to its client and developed the savings habit.
 Site suitable ACSI is found in those study area have a plan importance to development
saving and credit to help communities to reduce risk, increase awareness of the saving
methods.
 An Amhara credit and savings institution is strongly management and controlling
systems modernization saving system to accept before society.
 To collaboration with commitment to support rural former and urban society.
 Strongly benefit
 Saving and credit loans.
 Amhara saving and credit institutions is strongly management and controlling systems
modernization saving system to accept before society.

Weakness
 ACSI used or service it's clients through manual systems.
 Absence of enough information about agribusiness and value chain management
department.
 Facilities problems such as computers,absence of recorded data about the back ground of
the study area.
 Due to the work load to employees it was difficult to acquire necessary knowledge from
the organization.
 Some farmers was not punctual during studying time and interview.

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  There was lack of skilled human power and interactions in the organization.
 There was lack of the necessary material related to my title.
 The unwilling of some workers to give adequate information about the study area and
history of the organization.
 Lack of the transportation while I went to the study area.
 There was lack of agreements among workers in the study area because of the of some
workers have not allowed giving information about about the back ground of the study
area.
 Shortage of the time to perform the given assignment.

Opportunities

 Amhara credit and savings institutions to bring or enhance low income society to middle
income society through giving loans ,giving training or advice.
 Currently in development of government saving program gives more attention limited
with value chain management controlling economic problems.
 Advanced technology, computer and mass media highly important sustainable services of
Amhara credit and savings institutions.
 Establishment of five years plan emanation poverty maroons saving activities.
Threats

 Risk due to the variability of the the income and uncertainty in the future in the rural
population.
 Weather conditions :the weather conditions also affect rural saving and credit services
management.
 Unbalanced income of society.
 Long periods poverty alleviation in that more than 75% people lived under poverty.
 Limited man power and back roundness of the people evidence about saving and credit
followed by traditional saving activities.

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 4.5 Structure of the organization
Amhara credit and saving institution offer services and product credit, saving, money transfer
and pension administration credit is given only for income generation activities based on
formation of solidarity groups. Major financial sources of ACSI are capital contribution by
shareholders. Donations income from operational and non-operational activities and saving
mobilized.

The organization structure of ACSI as follows.

General manager

Operation Finance Audit

Customer service
Human resource
Finance Operation

Saunter

Garden

Accounting

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 5. CONCLUSION AND RECOMMENDATIONS
5.1 SUMARRY AND CONCLUSION
ACSI is one of the largest MFIS in Ethiopia. The ACSI was established in 1995 according to the
Ethiopian commercial code and has been operating in Amara national regional state which is also
the largest and most populous regional state in Ethiopia.
The organization mission vision and objective emphasizes on how to improve the living standard
of the poor productive households. Financial services are critical enabler for sustainable
economic growth and there for poverty reduction and food security in Ethiopia.
ACSI in feleg birhan branch give financial service for poor productive people to start their own
business activity. It plays avital role for the community by creating job opportunity and the credit
used for investments to increase productivity of residents in case of feleg birhan.
It give service like credit, saving, money transfer. The organization has its own strength,
weakness, opportunities and threats though by using its internal strength and external
opportunities give adequate service to their clients

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5.2 Recommendations
Based on the result of this activity the following recommendations are drawn.
 Education is needed for rural population in order to participate and manage the
performance of saving and credit services management.
 The availability of trends staff and organization of relevant training programs in the field
of service management is needed.
 The staff of the study area have been responsible to give information about the rural
saving and credit and service management of the study area to the rural population should
participants in the evaluation of manager how it manages their cash capital and other
assets in the study areas.
 The manager have to stimulate female participation in the rural saving and credit services
management by sharing information about the saving and credit services.
 The federal and regional government should assist the rural saving and credit through
give training sharing information about saving and credit services management. The
members of the study area should also attended properly the information given by the
manager.

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 6. REFERENCES
.Modiglian F., (1998) :"The role of intergenerational transports and the life cycle saving in the
accomulation of wealth; journal of economic perspective.
A.maur,(1983):(ED).Moblization of house holds saving. Total for development, fimanrica,Milan.
Kebede li (2002):Agricultural credit analysis, national agricultural policy workshop Addis
Ababa.
Documents of ACSI (2004) institutional in felege birhan branch profile,current status and future
strategy
OAB .(2020) felege birhan district agricultural and rural development office,

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