Challenges and Prospects of Women Operated Micro and Small Enterprises: A Case Study of Aksum City Administration, Ethiopia

Abstract

The development of Micro and Small Scale Enterprises (MSEs) is becoming a very critical issue to create job opportunities for the unemployed, especially for women. However, various empirical studies show MSEs operated by women are mired with many challenges. They grow lowly and hampered with obstacles to sustain than those MSEs headed by male; high percentages of the Women Operated MSEs (WMSEs) were closed due to various reasons. Therefore, this study is initiated to systematically investigate challenges that influence the growth of WMSEs by taking the case of Aksum City Administration, Ethiopia. To this end, a mixed research approach is pursued. The quantitative data is gathered through questionnaire from 128 women. Moreover, Key informant interviews were also held with the local concerned administrations and experts. Secondary data was collected from books, journals, recognized websites and publications of the City. The findings reveal that the major challenges that hinder MSEs and their transformation towards Medium scale are the lack of working place; limited starting capital (credit ceiling); and the business arrangement in that wholesalers’ involvement in retailing activities which hamper enterprises to be vibrant and competitive.  The credit is not more than twenty thousand birr[1] that limit them to further invest in other moderate businesses such as milk cows which a single one needs more than 25,000 birr. Almost 86 percent of the respondents do not have modern bookkeeping record for registering the income and expenditure of their business. Most of them use the traditional rotating saving mechanism (ekub). Only one in every four entrepreneurs gets access of training pertinent to their business development. The level of changes in the business was assed through recalling method with the parameters of household expenditure coverage and asset generation. More than half, 55.5 percent, of the respondents believe that the business has created asset where as 82.8 percent stated it covers their regular expenses. Given the comparison of paired means of variables, except telephone expenditure and household size, there is statistically significant difference between the current and initial status. In order to mitigate working place problems, stakeholders like the City Administration MSE office, trade and industry and the land administration should have a joint plan; more financial accesses for women shall be introduced; With the support of the community, Trade and Industry should seriously follow up the operation of WMSEs; a fair competition and healthy market arrangement shall be established; the microfinance institutions should revisit its policy to ease the credit access and there should be a room to provide credit without group formation if the customer has an equivalent asset for collateral.

Key words: Micro and Small Scale Enterprises, Challenge, Aksum City Administration

[1] In 2013,   1 USD =19.12 Ethiopian Birr