Review on Determinant of Small and Medium Enterprise Growth in Ethiopia

Abstract

In Ethiopia, Micro and small enterprises (MSE) serves as a source of income, employment and poverty reduction. The objective of this review is to examine determinants of MSE growth in Ethiopia. Accordingly, SME growth is mostly impacted by limited access of credit service, Lack of market linkage and information, business skill gaps, lack of sustainable training, financial constraints,   poor technology, shortage of electricity and lack of reliable Power Supply, lack of infrastructure, lack of experience and high interest rate. The study recommends that the financial institutions in Ethiopia like banks and microfinance institutions should provide financial assistance through improving their borrowing procedures by lowering the interest rates and collateral and simplifying the lending systems by removing the tight borrowing regulations is vital for easier accessibility to credit by SME. Business training must be provide to the SMEs by government and non-government organization to facilitate business knowledge and  give sufficient managerial and marketing skill training for MSE to change the traditional way of operating and marketing business in to the modern types of production and marketing

Keywords: SME, challenges, growth, Ethiopia

DOI: 10.7176/EJBM/13-5-03

Publication date:March 31^st 2021