The Contribution of Micro and Small Enterprises (Mses) in Local Economic Development: The Case of Metal and Wood Work Mses in Mekelle City of Tigray Regional State.
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Date
2009-02
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Addis Ababa University
Abstract
The objective of this study is to investigate the contribution of MSEs in local
economic development in Mekelle urban local government, Tigray regional
state. Sample was taken from 486 metal and wood work MSEs which
have been registered by Mekelle town trade and industry office. 102 micro
and small enterprises (MSEs) were selected randomly by considering their
year of establishment and type of ownership (68 individually owned and
34 cooperative enterprises). In the study various local economic
development indicators like employment creation, income generation, local
input and market linkage, taxation and contribution to local community
development were assessed. It has also assessed the characteristics of the
enterprises and the constraints that faced the enterprises during
operation.
The study employed different methods of data collection instruments, a
questionnaire survey covering a total of 102 sample enterprises were
conducted in the town. Besides, focus group discussion and interviews
with MSE operators as well as the support office experts have undertaken.
The findings of the study found out that the majority of metal and wood
MSEs in the study area engaged due to background skills and experience.
The sources of finance for the start-up were their personal savings. With
regard to the contribution of the MSEs to local economic development, the
study found out that the enterprises are contributing a lot in terms of job
creation, re-investment of their profits, utilize inputs from local suppliers,
produce for local market, generating income (tax) to local government and
contribute to the local community by raising money for roads, education
and health.
The survey also revealed many constraints to the MSE, such as limited
access to finance (loan), work premises, less availability of market, low
entrepreneurial and technical capacity and low follow up and support
services which all together have negative influence to the development of
the enterprises.
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Local Economic Development