Reviews on the Contributions of Micro and Small Business Enterprise and Performance in Ethiopia. Reviews Paper

Abstract

Micro and Small Enterprises (MSEs) play an important economic role and recognized as an important vehicles of employment creation, income generation and poverty alleviation. The purpose of this article reviews was to reviews the contribution of MSEs and it factors constraining the growth of micro and small business (MSEs) growth in Ethiopia. The reviews were based on the secondary data that are published on the micro and small business in Ethiopia. The several authors argue that employment generation by the small business may be high in quantitative term but very low in quality. Technological up-gradation would enable the small firms to create quality employment improving remuneration, duration and skill. This structural shift may reduce the rate of employment generation in the short run but would ensure high-income employment generation in the long run. Furthermore, It provides employment opportunities, encourages and sustains self-reliance, provides technical inventions and innovations promotes competition in the market which acts as a check in the activities of monopolists, utilize waste product from big firm for further production. Therefore, this article reviews shows that poor government regulation, evaluation, follow, working premises, initial investment, high collateral requirement from financial institutions, lack of clear job description among members, lack of training, poor linkage of MSEs to the market, were some infrastructural, managerial, financial, legal, and marketing challenges as factors affecting the growth of MSEs in Ethiopia. Therefore, the concerned office should support the MSEs to tackle factors hindering its growth. MSEs should tie to the market and members should develop culture of working together for the growth of SMEs.

Keywords: Micro business, Economic Growth, Challenge, Employment, Empowerment, Ethiopia

DOI: 10.7176/JESD/12-15-05

Publication date:August 31^st 2021