An Assessment of the Business Environment and Growth Potentials of the Knitwear and The Hand Loom Weaving Micro and Small Enterprises in Selected Sub Cities of Addis Ababa

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2008-07

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Addis Abeba university

Abstract

This study assessed the business environment in which the knitwear and handloom weaving micro and small(MSE) were operating in and evaluated their growth potentials. The study employed descriptive cross sectional survey consisting of a structured questionnaire triangulated using focused group discussion and personal observation. A sample of J II clothing enterprises, 64 knitwear and 47 handloom weaving ji-om selected areas of the KoifeKeranyo and the Gullele sub cities were selected using simple random sampling techniques. Descriptive statistical tools like frequency tables, cross tabulations, averages, and percentages were employed. A chi -square test was also used to test statistical significances between the different variables under the study. A number of variables related to the operational constraints such as internal factors, rule and regulations, market related problems and support services were reviewed. Opportunities for growth were also assessed. The study utilized univariate and bivariate analysis techniques. Chi-square test was used to test the correlation between some variables. The findings of the study revealed that the knitwear and handloom weaving clothing MSEs were constrained by internal and external factors. Internally, they were constrained by poor workmanship and poor production process and organization which were combined to reduce their productivity. These in turn were exacerbated by external factors. These were low demand, poor provision of raw materials, absence of fabric design patent policies, competition of the local markets through new and secondhand imported cloths. These factors combined to affect the business environment in which they were operating. On the other hand, the existing spatial pattern of these entelprises pointed a tendency for horizontal cooperation among the enterprises. This might strengthen their capacity. Besides there were yet unexploited internal and external market potentials. Exploiting these potentials requires clearing their business environment first. This again calls for policy tailoring. Appropriate policies should be devised to address their problems. The study, therefore, underscores the need for appropriately targeted market, regulatOlY and support interventions which would help those enterprises breaks the viciously chained impediments they were encircled in.

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Assessment of the Business

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