Gebremariam, Fesseha Mulu. 2017. ‘Factors Affecting the Growth of Women-Operated Micro and Small Enterprises (MSEs) in Ethiopia’. Üniversitepark Bülten 6 (1): 56–66.
The role of micro and small enterprise for a country’s socio-economic development is explained at the introductory part of the article. Accordingly, entrepreneurship is indicated as a means for self-employment, increasing productivity, innovation and enhancing youth engagement in income generating activities. According to the author, the sector absorbs a huge labour force, whereas half of the urban population are engaged in this sector and the capital city Addis Ababa, accounts for 40% of the total micro and small enterprises sector. Even though the author acknowledges the contribution of the sector for women’s economic empowerment in Ethiopia, he notes that the sector is male dominated and women engage only in areas that require small capital/investment. Among the various MSEs sectors, women dominate the service delivery and are less represented in the manufacturing industry. This is due to limited capital, lack of access to credit service and lack of adequate skill-based training.
The researcher conducted a desk review of literature and national policies. Following this, the author has found that MSEs have supported a large number of jobless youths in Ethiopia including women who otherwise couldn’t find a job with no or little start-up capital. In his findings the author classified challenges faced by women entrepreneurs as economic and social. Economic challenges include financial constraints, limited knowledge and experience, lack of access to market, product quality, poor infrastructure, and lack of electric power supply. The social challenges faced by women entrepreneurs are, lack of public trust and unfair treatment due to gender biases. By lack of public trust, the author referred to society’s negative attitude toward women operated business and their products. As a result they are unfairly treated when it comes to access to credit, and marketplaces.
According to the author, financial constraint is the main challenge faced by women entrepreneurs. Women in this sector lack adequate capital for their investment and in most of the cases they don’t get access to loans and other financial services. This is due to the reason that Banks and other financial institutions require collateral which women can’t afford. Even those women who get access to formal financial services don’t find it sufficient to finance their business and expand the existing one. The second economic challenge is lack of adequate entrepreneurial skills. According to the findings, women in MSEs assume that the sector doesn’t require sophisticated skill or knowledge. Due to this they lack the required skill and expertise to run and manage their business, and later face risks of business failures. Lack of access to the market is noted as the third economic challenge faced by women in MSEs. It is found that women in most cases are engaged in the service sector where they produce identical products and reach similar customers. They also lack market linkages and adequate market information.
Poor infrastructure is also indicated as one of the economic challenges faced by women in the MSEs. Infrastructure service including road, electric power, water, and telecommunication service has a crucial role for business facilitation. However, the author found out that lack of access to these major services negatively affected the performance and business operation of MSEs.
Finally, the author recommended that credit service and other means of financial support should be provided for women entrepreneurs. Moreover, market linkage and connection should be facilitated to enable women to find raw material and sell their products to small and large firms.