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Micro- and Small Enterprises as Vehicles for Poverty Reduction, Employment Creation and Business Development: The Ethiopian Experience
[ Introduction ] [ TOC ]
TOC
Table of Contents
 
List of Abbreviations
vii
List of Figures and Tables
ix
1.
Introduction
1
 
1.1
Background and Statement of the Problem 
1
 
1.2
Research Objectives
4
 
1.3
Research Questions
4
 
1.4
Methodology
5
 
 
1.4.1
Study area
5
 
 
1.4.2

Sampling method and sampling size

5
 
 
1.4.3

Selection of key informants

6
 
 
1.4.4
Data collection
6
 
 
1.4.5
Data analysis
7
 
1.5
Limitations of the Study
7
2. 

Literature Review

8
 
2.1

The MSE Sector: Typologies and Definitions

8
 
2.2

MSEs, Economic Growth and Employment

13
 
2.3

MSEs and Poverty Reduction

14
 
2.4

MSE Promotional Programs

16
3.

The Urban Micro- and Small Enterprises Strategy and Its Implementation in the Study Towns and Regions

17
 
3.1

Institutional Structure

19
 
3.2

Modalities of Organizing MSE Activities

20
 
3.3

Support Services

21
 
3.4
Credit
21
 
3.5

Working Premise

22
 
3.6
Training
23
 
3.7

Market Linkage

24
 
3.8

Business Development Services (BDSs)

25
 
3.9

Access to Support Services

25
 
3.10
Graduation
26
4.

Micro- and Small Enterprises’ and Operators’ Characteristics in the Study Cities

27
 
4.1

Business Characteristics

27
 
 
4.1.1   

Business typology, businesses lines and gender composition

27
 
 
4.1.2

Business location and premises

30
 
 
4.1.3

License and regulation

31
 
4.2

Business Operators’ Characteristics: Demographic and Socio-Economic Conditions

32
5.

Business Development, Growth and Linkages    

34
 
5.1
Capital and Business Income
34
 
 
5.1.1

Capital

34
 
 
5.1.2

Business income

37
 
5.2
Business Environment and Competition
40
 
 
5.2.1

Business Environment

40
 
 
5.2.2
Competition
42
 
5.3
Business Linkages
43
 
 
5.3.1

Horizontal and vertical linkages (partnership and cooperation)

43
 
 
5.3.2

Local and external linkage

45
 
 
5.3.3

Linkage with the local farm sector

47
 
5.4
Service Needs and Assistance Received
48
 
5.5
Graduation and Future Plan
51
6.

Employment and Changes in Livelihood

52
 
6.1
Employment and Previous Employment Status
52
 
 
6.1.1

Employment

52
 
 
6.1.2

Previous employment statusand reasons for joining the MSE sector

55
 
6.2
Change in Livelihood
58
 
 
6.2.1

Asset levels and change in assets

58
 
 
6.2.2

Income levels and change in income and savings

60
 
 
6.2.3

Change in consumption

65
 
 
6.2.4

MSE operators’ perception on their livelihood

66
7.

Successes, Challenges and Policy Issues in the MSE Strategy

68
 
7.1
The Successes of the MSE Strategy
68
 
7.2
Challenges of the MSE Strategy
 
 
 
7.2.1
Nature and adequacy of the support services
69
 
 
7.2.2
Business expansion and competition
70
 
 
7.2.3
Entrepreneurship spirit
71
 
 
7.2.4

Inadequate capacity of the MSE sector offices/agencies

71
 
7.3
Policy Issues
72
 
 
7.3.1

The need for private sector involvement in providing micro- finance for MSEs

72
 
 
7.3.2

Addressing the needs of MSEs

73
 
 
7.3.3

Intensification of promotional activities

73
 
 
7.3.4

Sector specific support need to be fostered

74
 
 
7.3.5

Fostering linkages among and between MSEs

74
 
 
7.3.6

Reducing MSE dependency on the government

74
 
 
7.3.7

Existing MSEs need to be given attention

75
 
 
7.3.8

Coordination between the MSE sector and other sectors

75
Conclusion
75

Future Research Agenda

77
Epilogue
77
References
78

Annex: List of Persons Interviewed

82