Growth Determinants Of Women-Operated Micro And Small Scale Enterprises In Addis Ababa, Ethiopia

Abstract

The role of Micro and Small Enterprises (MSEs) in employment and income
generation is increasingly recognized for the unemployed people especially for women and has become a major playing field for policy makers and donors with dual objective of enhancing growth and alleviating poverty. MSEs are particularly important for women since they offer a more flexible, less restrictive form of employment and can be undertaken by the skill they acquire. This study investigated the constraints and key determinants of growth particularly in employment expansion among women's-enterprise based on the survey-covering 123 business units randomly selected in four Kebele s of Nifas Silk-Lafto and Kirkos sub cities of Addis Ababa. Major finding showed that marketing problems due to presence of competitors with identical products change in demand and absence of market linkages are the basic constraints to the growth of women operated enterprises. Lack of enough working space, raw material accessibility, shortage of working capital and lack of availability of enough loan access are the subsequent growth barriers for women's enterprises. The use of external finance is found to have a positive contribution for enterprise growth. Therefore, adequate provision of finance should be the main element in the development programs. The provision of finance based on their saving amount and saving habits encourage more women to take loans since they mostly lack economic
resources and are unable to give collaterals. Therefore, it was recommended
among others that specialized microfinance services that benefit women
entrepreneurs must be established or encouraged.