Factors Affecting performance of Micro and Small Enterprises in Addis Ababa: the Case of Addis Ketema Sub City Administration (City Government of Addis Ababa)
No Thumbnail Available
Date
2017-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
In Ethiopia, MSE is one of the institution given recognition in the country’s industry development
plan, but despite its potential contribution to poverty reduction and employment creation, the gov-
ernment until very recently, had not extended adequate support to the development of the sector
Thus, this paper carried out with the objective of assessing the financial and operational determi-
nant factors affecting MSE growth in Addis Ababa by measuring the key MSE’s performance fac-
tors of some selected enterprises who are working in Addis Ketema sub City Administration. In
this research work descriptive type of research used, relevant data collected from primary and
secondary data sources. Thus, the researcher concluded that business startup environment and
registration process found to be simple and easy, but still there is confusion among MSE operators
regarding VAT registration, getting TIN identification number and Certification of competency
application. Enterprises considered these issues as challenging tasks that makes business startup
in the sector very tough. Majority of MSE operators rated infrastructure access has not been im-
proved and hugely affecting their performance; getting working premises is still a time consuming
and challenging task for them. Credit access for MSEs is limited; institution involved in providing
loan are also limited. This research work also revealed that higher interest rate for loan, higher
collateral requirement of loan providers, short period of loan repayment and limited institutions
willing to provide loan for MSEs well-thought-out as great challenges. This research work point
out that existence of favorable MSE policy, access to finance, and access to working premises in
support of appropriate business development service, managerial and technical skill backing will
enhance MSE enterprise growth. The government has to work hard collectively to address the
above-indicated constraints
Description
Keywords
Addis ketema sub city, Administration