Policy Direction and Performance Evaluation of Micro and Small Enterprises in Southern Nations, Nationalities and People’s (SNNP) State of Ethiopia

Abstract

The role of micro and small enterprises in development and poverty eradication efforts is significant due to its combined nature of massive job creation and employment opportunity. In view of this, the current Ethiopian government has embarked on facilitating several organizations to create workable environment for micro and small enterprises. Although casual sectors have been working in Ethiopia for decades and support many poor families, the modern idea of micro and small enterprises has reinforced these efforts by taken a form of institutionalization transformation. This modern scheme of institutionalization is currently supporting casual sectors and inviting a number of new entrants to the enterprises. This paper presents the Ethiopian government policy direction and evaluates the performance of micro and small enterprises in Southern Nations, Nationalities and People’s State (SNNP). The presentation and evaluation are based on SNNP’s 2012 to2013 data. The paper also discusses the supports given to enterprises by the government. Descriptive and inferential statistics are used to analyze the data. In addition, policy documents are reviewed and compared with the actual performances. The results showed that there are strong and positive relations between supports provided by the government and the performance of micro and small enterprises. The result indicated that all forms of governmental supports are important and imperative for the growth and productivity of micro and small enterprises.

Keywords or phrases: Micro and small enterprises, Poverty elimination, Job creation, Policy and strategy, and Sector