The Contribution, Opportunities And Challenges of Micro And Small Enterprises (Mses) In Local Economic Development: The Case of Industrial Sector In Sendafa Bekie Town of Oromia Regional State
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Date
2012-07
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Addis Ababauniversity
Abstract
In Ethiopi a, the size of the labour force co ntinues to grow more rapidly than the abil ity of the
economy to provide new employment opportunities. Sti ll now a lmost a ll of the studies were
undertaken in major cities of Ethiopia where those studies are not inclusive in the sense that
research undertaken in speci fic town may not be applicable in a ll areas as the factors determining
the growth and expansion ofMSEs differ among different areas.
The object ive of this study is therefore, to examine contribution of MSEs in generating
employment opportunity and income generation, to ident ify the opportunities avai lable for the
growth, expansion, challenges that hindered the development of MSEs, to measu re effic iency
level and ident ify factors affect ing the performance of MSEs to the local economic deve lopment
of indu strial sector in Oromia Reg ional State, Sendafa Bekie.
The study used both secondary data and survey method. The survey method involved 104 MSE
operators. The sample was taken from formally registered MSEs by the Sendafa Bekie Trade and
Market Expansion o ffice and MSEDA office. Among the reg istered MSEs, lentil processin g,
sewing clothes, metal work, wood work and food related of the indu str ial sector were selected
based on a combinat ion of high proportionate share and economic importance in the town.
The findings of the study have important implications to the employment creation for 1637 local
unemployment fi'om 2006107- 2010/1 I, which is vital to reduce unemployment, improve
community livelihood through diversify ing income generat ing mechanism which is 9,423 ,081.50
birr earned by 1637 employees and the MSE business owners paid taxes 675,801.9 birr to the
local government. However, the ir major constrai nts were lack of suffic ient capital and training.
Lack of finance and trai ning were the most crit ical constrain ing factor for the study area. The
Sendafa Bekie loca l government has to fac ilitate the growth of MSEs by accessing necessary
infi'astructural facilit ies and work premises. MSEs especially in dustrial sectors require educated,
well trained, and tech no log ica lly sk i II workers. Creation of awareness of ent repreneurs to fo llow
a product diversification strategy through training, mass media, experience exchange, best
practice and scaling-up of best practices arrangements were vital
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Keywords
Economic Development