Prospects and Problems of Micro and Small Enterprises [MSEs] in Ethiopia [The Case of Addis Ababa]

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This paper gives some detailed evidence on the background of the MSE operators/MSEs and presents a systematic analysis of the marketing and other related problems, their impact on development of the MSE sector in Ethiopia and the constraints. It is based on primary data collected from 93 MSE operators using a structured questionnaire prepared for the purpose. Although there have been serious attempts by the govenunent to liberalize and improve the envirorU11ent of the MSE sector, which resulted in increase in investment and competition and improvement in the licensing procedures, information from the survey data indicates that there is divergence between policies and directives issued and their actual implementation on the ground and there are still problems which requires due attention to alleviate the problems with regard to marketing, finance and appropriate working areas. The results show that capital shortage, inadequate business premise, inadequate/uncertain market and high taxes are the major constraints for MSEs in Ethiopia. Moreover, the MSE operators revealed that the policy predictability is quite low which implies that a lot remains to be done to create an enabling policy envirol1I11ent for the MSE sector. Concrete and coordinated regulatory and in stitutional SUpp0l1 (infrastructure fac ilities like business premises, water and power; financial services; ex tension services; assistance in the transfer of teclmologies; promotion of marketing faci lities; and provision of training on sustainable basis) has yet to be provided by the government.



Problems of Micro and Small Enterprises