Factors Affecting the Development of Micro and Small Scale Manufacturing Enterprises in Addis Ababa: The Case of Selected MSME’s in Yeka Sub-City

Abstract

This study investigates the factors affecting the development of micro and small-scale manufacturing enterprises (MSMEs) in Addis Ababa, focusing on selected MSMEs in Yeka Sub-City. MSMEs are vital to the economic development of Ethiopia, providing employment opportunities and contributing to poverty alleviation. Despite their significance, these enterprises face numerous challenges that hinder their growth and sustainability. The research employs a mixed-methods approach, incorporating both quantitative surveys and qualitative interviews to gather comprehensive data from MSME owners, employees, and relevant stakeholders. Key findings indicate that access to finance, inadequate infrastructure, limited market access, and regulatory challenges are the primary factors impeding the development of MSMEs in Yeka Sub-City. Additionally, the lack of business development services and technical skills training further exacerbates these challenges. The study also highlights the significant role of government policies and support programs in fostering a conducive environment for MSME growth. The research provides recommendations for policymakers, including improving access to credit, enhancing infrastructure, and streamlining regulatory processes. Furthermore, it suggests the need for targeted training programs to equip MSME owners with essential business management skills. These interventions are crucial for unlocking the potential of MSMEs and ensuring their contribution to the socio-economic development of Addis Ababa and Ethiopia at large. By identifying the key barriers and proposing actionable solutions, this study aims to contribute to the existing literature on MSME development and inform policy decisions that will support the sustainable growth of micro and small-scale manufacturing enterprises in Addis Ababa.