Micro and Small Enterprises and Their Influences in Alleviating Urban Poverty in Nekemte City Oromiya Regional State
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Date
2007-07
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Addis Ababa University
Abstract
Poverly aile vial ion is lop on Ihe agendas of 1170sl developing counlries 10 dignify Iheir citizens wilh
decenlliving condilions. To Ihis end, Ihe development of Micro and Small Enlerprises (MSEs) has been
recognized as an imporlant 1001 to creale employment opportunities for the poor thereby increase their
income.
This study investigates the influence of group-based MSEs in allevialing urban poverty in Nekemte
CiIY, Oroll7iya Regional Stale. A sample was taken Fom 42 group-based micro and small enterprises
which have been regislered and supporled by the City Trade, [nduslly, and Tral15pOrl Department.
Eight group-based MSEs were selecled randomly by considering Iheir geographical dislribution and
nature of aclivilies in Ihe city. Two MSEs which starled business afier Ihree monlhs were laken as a
conlrol against which 10 assess Ihe eJJecliveness of MSEs on poverty alleviation. Various poverty
indicalors like, income, consumplion expendilure, housing, assel crealion, educalion, health, wa/er,
vulnerability and empowerment of women entrepreneurs were assessed.
The study utilizes various slatistical lools like descriplive statistics, Chi-square tesls, T-tests, and
ANOVA tesls 10 reflect the true nalure of MSEs in alleviating poverty in the study area. The sludy also
Iries to examine the nature and struClure of group-based MSEs in Nekemle town so as 10 identify the
problellls and opportunities Ihat exisllo supporlthe development of the enterprises.
The sludy findings are that group-based MSEs in the study area have got various Iypes support ji'Oll1
Ihe Nekemte City Municipality in Ihe area of access to start-up capital through credil, work premise,
and lIIarket access. However, some group-based MSEs are can fran led with delays in Ihe paymenl for
Iheir produce, quality work and market premise, and inadequate services like waleI' and electricity.
When il comes to the impact of group-based MSEs on alleviating poverty of operalors and their
households, the study finds that operators have showed improvement, in their income, consumplion
expendilure, and access 10 services like rented house, educalion, health, asset creal ion, averting
vulnerability, and empowerment of women entrepreneurs.
The study underscores the need for appropriale support 10 keep the suslainabilily of such MSEs given
Iheir importance in improving living condilion of opera/aI's and slilllulaling Ihe local economy.
Kcy TCI-ms: urban poverty, Nekemte city, group-based MSEs.
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Keywords
urban poverty, Nekemte city, group-based MSEs