Policy Framework of Small and Micro Enterprises and Its Role on the Development of the Sector in Bahir Dar City, Ethiopia

Abstract

It is obvious that micro and small enterprises play vital roles for economic growth, job creation, and poverty reduction for a nation both in developing and developed countries across the globe in which they are the means through which accelerated economic growth and rapid industrialization have been achieved in developed countries. The purpose of this study was to assess the contribution of small and micro enterprises’ strategy (policy framework) in alleviating the problems of small and micro enterprises in Bahir Dar city, Ethiopia, in particular reference to the manufacturing enterprise sub-sector. Descriptive survey method; stratified and simple random sampling technique were used. Quantitative data were collected using questionnaire containing close-ended and few open-ended questions from 138 sample respondents. Although there have been attempts by the government and other stakeholders to improve the working environment of micro and small enterprises in Bahir Dar city, based on the regression analysis result, the sector has been suffering from a number of such as availability of capital, distribution of working place access to facilities (electricity, water, telephone, etc.) and legal framework were the most dominant factors that influence the development of small and micro enterprises in Bahir Dar city respectively. Indeed, the establishment of the policy framework has been appreciated but the formulation of the policy by itself does not alleviate the problems of small and micro enterprises and could not support the development of the sectors, thus, it is concluded that the strategy of small and micro enterprises has to be implemented in a full-fledged manner to alleviate the problems that small and micro enterprises face. Finally, the result of the survey calls for concrete and coordinated regulatory and institutional support in working places, financial and extension services, provision of facilities like road, water and electricity services.

Keywords: Bahir Dar, Small and Micro Enterprises

DOI: 10.7176/PPAR/9-4-01

Publication date: April 30^th 2019