THE ROLE OF MICRO AND SMALL ENTERPRISES FOR ECONOMIC EMPOWERMENT: THE CASE OF ADDIS ABABA, ETHIOPIA

Abstract

This research was aimed at identifying the role of micro and small enterprises for economic empowerment in the case of Addis Ababa City. The study used a stratified systematic random sampling method to select 120 micro and small enterprises and 30 from each 4 sub cities (Kirkose, Yeka, Bole and Arada). Data were collected using survey questionnaire and analyzed using descriptive and narration methods. The descriptive result showed that the source of finance at the start-up were mainly family and the major constraints of the enterprises are lack of access to market, finance, raw material, problems in law enforcement, poor infrastructure and tight bureaucracy. The prospects of the enterprises in the study areas were increasing demand for products & services provided by MSEs. It can be clearly observed from the study that majority of the MSE operators have TVET/Diploma level of education. The average start-up capital of enterprise was Birr 9,194 with an average of 5.87 employees and, at the time of the study, the average employment was 6.12 employees with current capital of the enterprise Birr 168,906. Before joining MSEs, the average annual income of employee were 11,008.33 Birr and the current annual income of employee are 76,402.50 Birr. As indicated in the study, majority of the respondents intend to continue with the current business because of its positive gains. So, it has bright future prospects for micro and small scale enterprises. Similarly, the descriptive result shows the role of MSE for economic empowerment in terms of income creation and employments generation are to be mentioned. In general, concerned body should enhance the productivity of micro and small enterprises through training, entrepreneur skill development, access to credit, working premises and market linkage in order to make economic empowerment driven to be source of inputs for medium and large enterprises at large.