PRACTICES AND CHALLENGES OF MICRO AND SMALL SCALE ENTERPRISES IN THE CASE OF SELECTED DISTRICTS IN AKAKIKALITY SUB-CITY

Abstract

Micro and Small enterprises are driving force for economic growth, job creation and poverty reduction in developing countries. Ethiopia is one of the countries which have taken measures to enhance the operation of micro and small scale enterprises (MSEs). However, there are MSE’s in the country that have deteriorating performance and have been experiencing near to cease with no significant graduation from one enterprise level to the next. This study was conducted in some selected districts of Akaki-Kality Sub-city with the purpose of analyzing the practices and challenges of MSE’s operations. For achieving the objectives of this study, 89 questionnaires were distributed and 81 of them were successfully completed and analyzed using descriptive (percentages, mean and standard deviation) statistical analysis. The participants were selected using stratified and simple random sampling methods. In addition, face-to-face interview were conducted with 12 sub-city and district officials and experts; and 9 MSE’s owners through semi-structured interview questions and the questions were analyzed using descriptive narrations through concurrent triangulation approach. The study identified inadequate infrastructure facilities, inadequate finance, poor managerial and technical skills and inadequate working premises as the major challenges of MSE’s followed by marketing problems, low support from respective institutions, inadequate supply of raw materials, and regulatory issues. Hence, the study concluded that MSE’s operation in the study area is influenced by the above identified variables. In line with the findings obtained recommendations to respective governmental bodies and MSE’s owners/managers are forwarded. In addition, further investigation suggestions for other interested researchers have been forwarded. The study helps to create awareness to MSE’s official and owners, and it will give chance for others who are interested on micro and small scale enterprises practices and challenges to make further studies and this may add something of value to the existing body of knowledge related to the issue of MSE’s operation.