The Role of Micro and Small Enterprises in Poverty Alleviation in Gulele Sub City, Addis Ababa Ethiopia

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Addis Ababa University


Since the 1970s there has been a strongly growing interest in considering the role of Micro and Small Enterprises (MSEs) as a viable strategy for the poor. Ethiopia is also one of the countries where MSEs has been given due consideration as a safety net for the poor to help them overcome the adversities of poverty in post 1991. MSEs, as mentioned above, is basically set up with the goal of poverty alleviation. Hence, the situation whether the objective of these MSEs is met merits special consideration by way of impact assessment. Although several studies have been conducted so far, the impact of MSEs on poverty reduction still remains an issue to be addressed. This study tries to answer three important questions: are MSEs able to increase the income of the Managers/Operators as well as the other members of the enterprises who are taking part in MSEs of the sub city?;can MSEs contribute in alleviating poverty of the managers’/operators’ as well as the other members of the enterprises’ who are taking part in MSEs of the study area? and what are the constraints and problems with regards to MSEs operation in Gulele sub city? With the above objectives in mind, the research work employed questionnaires, key informants; focus group discussions, and observations to obtain primary data. In addition, secondary sources of data have also been used. Eventually, using a mix of qualitative and quantitative tools, the study found out that MSEs has played positive role in income, creation of employment and improving the quality of life of the participants , either the managers/operators or other members of the enterprises of the MSEs in the study area. However, shortage of start up capital; high interest rates; lack of skilled personnel; inadequate support from Government/NGOs; unaffordable tax and /or rent and lack of production place are among the major constraints for the operation and growth of MSEs. Hence, there is a need for strengthening the MSEs growth by expanding the micro- finance institutions and providing especial financial support for the sector. Government and NGOs support should also be focused on training and consultancy services or in general informative services concerning market, documentation or accounting system



Gulele Sub City Addis Ababa, Ethiopia