Financing Through Trade Credit

The fact that supplier credit does not require any identifiable collateral and reduces information asymmetries enables credit rationed enterprises access to credit in many countries. However, determinants of trade credit use by these enterprises are dynamic with particular to country context. Hence, the aim of the work was to investigate the determinants of trade credit use in Ethiopian context through empirically justified hypotheses. Private traders and concerned government offices that are concerned with the promotion of trade and private sector development need to take determinant factors of trade credit use into consideration in order to enhance trade credit use by private traders