ST.

MARY UNIVERSITY
SCHOOL OF GRADUATE STUDIES

FACTORS AFFECTING WOMEN ENTREPRENEURS

IN
ADDIS ABABA
BY
ZINASH ABEBE

A THESIS SUBMITTED TO ST.MARY’S UNIVERSITY, SCHOOL OF

GRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS
ADMINISTRATION (MBA)

NOVEMBER, 2014
ADDIS ABABA, ETHIOPIA
 ST. MARY’S UNIVERSITY
SCHOOL OF GRADUATE STUDIES
FACULTY OF BUSINESS

FACTORS AFFECTING THE PERFORMANCE OF WOMEN

ENTERPRENEURS IN ADDIS ABABA METROPOLITAN:
(WITH SPECIAL FOCUS ON LEADERSHIP AND GOVERNANCE)

BY

ZINASH ABEBE DUBALE

ID NO.SGS/0074/2004B

APPROVED BY BOARD OF EXAMINERS

____________________ ____________________

Dean, Graduate Studies Signature, Date

____________________ ____________________

Advisor Signature, Date

____________________ _____________________

External Examiner Signature, Date

____________________ _____________________

Internal Examiner Signature, Date

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 DECLARATION

I, the undersigned, declare that this thesis is my original work, prepared under the
guidance of Mesfin Lemma (PhD). All sources of materials used for the thesis has been duly
acknowledged. I further confirm that the thesis has not been submitted either in part or in
full to any other higher learning institution for the purpose of earning any degree.

_________________________ ______________________
Name Signature & Date

St. Mary’s University, Addis Ababa NOVEMBER, 2014

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 ENDORSEMENT
This thesis has been submitted to St. Mary’s University College, School of
Graduate Studies for examination with my approval as a university advisor.

Mesfin Lemma (PhD) ______________________

Advisor Signature& Date

St. Mary’s University, Addis Ababa November, 2014

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 ACKNOWLEDGEMENTS

First, I would like to thank to all the incredible women who agreed to participate in this study
especially those members of AAWEA, AWEP, EWEA and the facilitators. Without them, it
would be impossible to conduct the research.

Second, I would also like to thank to my Advisor, Dr. Mesfin Lemma (PhD) who made the
process of writing a thesis well-structured and organized, and was always ready to help with
advises and guidance.

Thirdly, I also appreciate the support of my family, especially my husband, and also friends and
colleagues, who encouraged me all the way through.

Last, but not least, I would like to thank to Cherinet Assefa, who was the main source of
inspiration for this thesis.

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 CONTENTS
ACKNOWLEDGEMENTS ...................................................................................................................... iv
LIST OF TABLES................................................................................................................................... vii
LIST OF FIGURES ................................................................................................................................ viii
ACRONYMS............................................................................................................................................ ix
ABSTRACT .............................................................................................................................................. x
CHAPTER ONE:INTRODUCTION ......................................................................................................... 1
1.1 Background of the Study .............................................................................................................. 1
1.2 Statement of the Problem.............................................................................................................. 2
1.3 Research Questions....................................................................................................................... 3
1.4 Objectives of the Study................................................................................................................. 3
1.5 Significance of the Study .............................................................................................................. 4
1.6 Scope of the Study ........................................................................................................................ 4
1.7 Limitation of Study ....................................................................................................................... 5
1.8 Definitions of Terms ..................................................................................................................... 5
1.9 Organization of the Study ............................................................................................................. 6
CHAPTER TWO:RELATED LITERATURE REVIEW .......................................................................... 8
2.1 Definitions of Entrepreneurship .................................................................................................... 8
2.2. Theories of Entrepreneurship and Perspectives ............................................................................. 8
2.2.1 Mises: Entrepreneurial As Mental Act ............................................................................. 10
2.2.2 Kirzner: The Universal Entrepreneur ............................................................................... 11
2.2.3 Schumpeter: The Innovative Entrepreneur ....................................................................... 12
2.2.4. High: The Entrepreneur as Originator of Institutions ...................................................... 14
2.2.5 Biological Theory of Entrepreneurship ............................................................................ 15
2.3. Entrepreneurship in Africa ........................................................................................................... 15
2.4. Women Entrepreneurship in Ethiopia .......................................................................................... 16
CHAPTER THREE:RESEARCH DESIGN AND METHODS .............................................................. 21
3.1 Research Design ............................................................................................................................ 21
3.2 Study Population ........................................................................................................................... 21
3.3. Sample Size and Sampling Technique .......................................................................................... 21

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3.4 Data Collection and Instrumentation ............................................................................................ 22
3.5 Data Analysis Methods ................................................................................................................. 22
CHAPTER FOUR:DATA PRESENTATION, ANALYSIS AND INTERPRETATION ...................... 24
4.1. Women Entrepreneurs Profile .................................................................................................... 24
4.2. Features of Entrepreneurs ........................................................................................................... 29
4.3. Factors Affecting Women Entrepreneurs Performance .............................................................. 40
4.3.1. Economic Factors ............................................................................................................. 40
4.3.2. Social Factors ................................................................................................................... 41
4.3.3. Legal and Administrative Factors ..................................................................................... 43
4.4. The Science and Art of Leading Organizations Leadership ....................................................... 45
4.4.1. Business Challenges ......................................................................................................... 45
4.4.2. Support Sought ................................................................................................................. 46
CHAPTER FIVE:SUMMARY, CONCLUSION AND RECOMENDTIONS ....................................... 48
5.1. Summary of Findings ................................................................................................................. 48
5.2. Conclusion .................................................................................................................................. 50
5.3. Recommendations ...................................................................................................................... 51
References .............................................................................................................................................. 54
APPENDIXES ........................................................................................................................................... 59

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LIST OF TABLES
Table 1: Employment Generated

Table 2: Reasons to Starting up Business

Table 3: Sources of Finance to Starting up Business

Table 4: Economic Factors

Table 5: Legal and Administrative Factors

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LIST OF FIGURES
Figure 1: Respondents Age Group
Figure 2: Respondents Level of Education
Figure 3: Entrepreneurs Work Experience
Figure 4: Business Life Span
Figure 5: Respondents Marital Status
Figure 6: Views of Respondents on Family Responsibility
Figure 7: Entrepreneurs Family Size
Figure 8: Women Entrepreneurs’ Business Sector
Figure 9: Employment Generated by Entrepreneurs
Figure 10: Entrepreneurs Business Legal Status
Figure 10: Years of Operations
Figure 11: Business Idea Initiator
Figure 12: Skills Acquired to Run the Business
Figure 13: Social Factor Analysis
Figure 14: Measures and Central Tendencies
Figure 16: Business Challenges
Figure 17: Supports Sought

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ACRONYMS
AAWEA Addis Ababa Women Entrepreneurs Association

AfDB African Development Bank

AWEP Alliance of Women Entrepreneurship Program

AWIB African Women in Business Initiative

BDS Business Development Service

CSA Central Statistical Agency

CWBR Center for Women Business Research

EWEA Ethiopian Women Exporters Associations

FDI Foreign Direct Investment

GDP Gross Domestic Product

GEM Global Entrepreneurship Monitor

ILO International Labor Organization

LLC Limited Liability Company

MoFED Ministry of Finance and Economic Development

OCED Organization for Economic Cooperation and Development

SMEs Small and Micro Enterprises

SSA Sub Saharan Affairs

UNDP United Nations Development Program

USA United States of America

UNICTD United Nations Trade and Development

WB World Bank

WTO World Trade Organization

WED Women Entrepreneurship Development

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 ABSTRACT
This study was designed to shade light on factors that affect the performance of women
entrepreneurs in Addis Ababa metropolitan. It also addressed the features of women
entrepreneurs in as well as their respective business and challenges encountered. Further the
study also assessed the leadership and governance competence of women entrepreneurs and the
required intervention measures by all concerned stakeholders. A sample of 79 women
entrepreneurs engaged in five sectors was taken for the study using stratified and simple random
sampling. In an attempt to providing answering to the basic research questions, a questionnaire
that include demographic profiles, characteristics of women entrepreneurs and their business,
factors that affect the performance of women entrepreneurs and supports they seek from
stakeholders was designed in a closed ended and Likert Scales. After the data has been
collected, it was analyzed using simple statistical techniques (tables and percentages) and
descriptive statistics (mean and standard deviations). The results of the study indicates the
personal characteristics of women entrepreneurs in Addis Ababa and factors that affect their
performance .It also shows that lack of own premises (land), financial access, inadequate access
to training, lack of proficiency in business planning and leadership, access to technology and
access to raw materials were the key factors that affect the performance of women entrepreneurs
in. The study also found that conflicting gender roles, social acceptability and, network with
outsiders were the major social factors that affect these entrepreneurs .Furthermore, the main
legal/ administrative factors include access to policy makers, interest rate, bureaucracies and
red tapes, and over all legal and regulatory environments. The study also found that issues like
human resources management, raw material supply, and access to utilities, financing as well as
restricting business regulations pose challenges to women entrepreneurs implying that business
establishment and operational challenges need to be given due accordance by the concerned.
This recommendation addresses Addis Ababa Women Entrepreneurs, Financial Institutions,
Educational Institutions and Sectoral Associations and responsible Government Organizations
to work in cooperation for the strong and feasible development of Women Entrepreneurs in
Addis Ababa.

Key Words: Competence, Entrepreneurs, Governance, Leadership, Performance

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 CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Various literature sources attest (Aldrich 2005; OECD 1998) that, globally, women have started
businesses in significantly greater numbers over the past two decades, though; gender inequality
in entrepreneurship continues to be prominent when compared to the traditional labor market.
For example, in 2005, (UNDP, 2012) women comprised fifty-six (56%) percent of professional
and technical workers and 42 percent of legislators, senior officials, and managers.

By contrast, Center for Women's Business Research (2004) in the same period, women were
majority owners of only 30 percent of all privately held US firms. Even Kim, Aldrich, and
Keister (2006) when taking into account income, wealth, industry and standard demographic and
human capital factors, men are still about twice as likely as women to pursue business creation as
a labor-market strategy.

Further, according to State of Women-Owned Businesses Report (2014), commissioned by

American Express OPEN, women in the United States of America are starting 1,288 (net) new
businesses per day, which is double the rate from only three years ago.

As daily business creation in USA hits a record pace, the number of women-owned firms
reached a new milestone in 2014. The fourth annual State of Women-Owned Businesses Report
estimates that there are more than 9.1 million women-owned businesses in the United States
(compared to 8.6 million in 2013). These businesses generated more than $1.4 trillion in
revenues, employ 7.9 million people and account for 30% of all enterprises.

As stated in a renowned news portal (allafrica.com, 2014), regardless of the challenges

confronting female entrepreneurs in Africa, they have succeeded in breaking new grounds on
entrepreneurship in the Continent. The same report brought in to light those women
entrepreneurs in Africa are confronted with many challenges. For instance, the most noticeable is
the cultural value or tradition of the African society. Therefore, not fully utilizing women
entrepreneurs’ ability is assumed to be as huge gap that must be addressed so that women can
take their deserving leadership role in the African society.

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Women owned enterprises are steadily growing (Atsede, 2014) in Ethiopia, and they are
contributing to household incomes and to the growth of national economies. Despite the
growing number of women entrepreneurs (WEs) in Ethiopia and their contribution to the
economy and reduction of societal problems, they still own and manage fewer small businesses
than men. The existing few studies focus on the position and profiles of women as micro and
informal entrepreneurs due to the interest of donors in targeting at this group of women
entrepreneurs.

As stated above, the problem here is that how far, as a nation, are concerned about the leadership
& management competency of Ethiopian women entrepreneurs as a key to having sustainable
growth and development of private sector. Besides, what kind of gap (individual and
Institutional) exists and what types of effort need to be done is the subject matter of this thesis.

1.2 Statement of the Problem

Major obstacles, according to (World Bank, 2014) report that hinders the role female
entrepreneurs can play in Ethiopia’s economy include limited access to vital resources such as
finance, land, training, education, and effective business networks. As such, the contribution of
women entrepreneurs to the economic development is not adquately utilized here in Ethiopia.

The notion is assreted by (Kepha, 2013) that Small and Medium Enterprises (SMEs) are
generally regarded as the driving force of economic growth, job creation, and poverty reduction
in developing countries. While the contributions of SMEs (Kepha, 2013) to development are
acknowledged, women entrepreneurs may face constraints that limit their long-term survival and
development.

In recent years (Minniti, 2010) the general attention to women and entrepreneurship in
developing countries has increased largely and the focus on this ‘untapped source’ of growth
seems to be indispensable nowadays for development practitioners and policy makers.

The assertion made by (Mulu, 2014) confirms to the conclusion by (Zewde & Associate, 2000)
under the theme “Jobs, Gender and Small Enterprises in Africa Preliminary Report on Women
Entrepreneurs in Ethiopia,” with the view to boosting employment through small enterprise
development among others affirmed that women entrepreneurs lack strong organizations and
face minimum coordination among Business Development Service (BDS) providers.

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The same research (Zewde & Associates, 2000) put forward critical areas for further
investigation mainly: What lessons can we draw from the experiences of women who have
grown their own businesses?

The study focus analyzing business management theory, leadership skills, and their applications
in the day-to-day business operation of companies owned and run by women entrepreneurs here
in Addis Ababa. This again goes with the works of (Mulu, 2014) that development services
provided to women’s entrepreneurial start-ups need to go together with human capital, social
capital and family life.

Furthermore, the thesis will apply the dimensions of leadership competency features like Self-
Management, Leading Others, Task Management, Innovation and Social Responsibility with the
view to assess to what extent they are applied in respective company management. Women are
not only raisers of tomorrow’s citizens, but also engaged in an endeavor to establishing as well
as running their own business. As a result, we are now able to witnessing Ethiopian women
owned companies operating in different sectors of the economy. The purpose of this study,
therefore, is to consolidate and draw lessons from earlier literatures on factors affecting women
entrepreneurs in Ethiopia as well as based on primary data research draw some conclusion as to
what needs to be done. This thesis will try to give answer to the following research questions.

1.3 Research Questions

1. What is driving force many women to start businesses?
2. What are the challenges facing Ethiopian women entrepreneurs?
3. How do women entrepreneurs respond to the constraints facing them?

1.4 Objectives of the Study

1.4.1 General Objectives

The main objective of conducting the thesis is give better insight and understanding of the
underpinning issues affecting the performance of women entrepreneurs in Addis Ababa.

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 1.4.2 Specific Objectives

As such this study aimed at examining the constraints to performance of the women
entrepreneurs whose business is operating (exporting and or local) in Addis Ababa, with the
following specific objectives:-

1. To identify know the driving force behined women entrepruners in Addis Ababa to start
their own business.
2. To establish the constraints faced by women entrepreneurs in Addis Ababa.
3. To analyze the influence of the constraints on the performance of women entrepreneurs
operating in Addis Ababa.
4. To examine how women entrepreneurs cope with the constraints.

1.5 Significance of the Study

The thesis among others provides fresh look in to the status of women entrepreneurs. While so
doing the study is expected to come up with list of the intervention areas needed by concerned
stakeholders to further enhancing the role of women entrepreneurs in the private sector. The
thesis also give an input to policy makers, academic institutions and others as to what need to be
done to augment the efforts of Ethiopia women entrepreneurs. Academic institutions by way of
this research and other similar undertakings may device curricula that address gaps in women
entrepreneurs and assist their respective companies to having strong institutional setup in place.

1.6 Scope of the Study

The study is conducted on women entrepreneurs whose business is operating in Addis Ababa.
The study is conducted in the last six month staring form June 2014. The study focuses on
identifying and addressing economic, social, administrative and legal factors affecting women
entrepreneurs here in Addis Ababa.

The focus of the study is women entrepreneurs having a variety of activities spread across major
sectors of the economy. The scope of the study is to know supports sought by women
entrepreneurs in Addis Ababa.

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1.7 Limitation of Study
Like many graduate study, the research has some shortcomings. This includes lack of no well-
documented secondary data on entrepreneurs and women business owners, time allotted for the
study is short viewed in terms of its significance the quality of data that is collected. Last but not
the very least, budget needed for collecting the data in the form of questionnaire and personal
interview is very limited.

1.8 Definitions of Terms

For the purpose of this thesis, the following terms are defined and need to be read in this context.

Competencies: - Most managers, and those responsible for management development and
learning, accept that competencies comprise a mixture of the following three elements: the skills
and abilities, knowledge, experience and understanding and the personal qualities, values
or attitudes we espouse. (Andrew Wilson, Gilbert Lensson, Patricia 2006)

Entrepreneur:- An individual who, rather than working as an employee, runs a small business
and assumes all the risk and reward of a given business venture, idea, or good or service offered
for sale. The entrepreneur is commonly seen as a business leader and innovator of new ideas and
business processes (investopedia.com).

Leadership: - Is a process of social influence in which one person can enlist the aid and support
of others in the accomplishment of a common task. Leadership involves establishing a clear
vision, sharing that vision with others so that they will follow willingly, providing the
information, knowledge and methods to realize that vision, and coordinating and balancing the
conflicting interests of all members and stakeholders. (Chemers M. 1997)

Micro Enterprises: - a microenterprise is considered a small business employing 10 people

(Wikipedia, 2010)

Setting Goals and Standards:- Ability to manage activities and projects toward measurable
goals and standards, setting these jointly with others so as to develop their understanding and
commitment and includes the following skills: distinguishing among wishes, activities, and
quotas; reducing barriers to the goal-setting process; evaluating goals against the major criteria
of effective goal setting; using goals to motivate. (MAP, 2013)

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Planning and Scheduling Work: - Ability to manage projects (one-time programs) and
processes (ongoing work flow) by applying the major tools and techniques of management and
includes the following skills: analyzing complex tasks and breaking them into manageable units;
selecting and managing resources appropriate to the tasks; using systems and techniques to plan
and schedule the work; setting checkpoints and controls for monitoring progress. (Eric L.
Herzog, 2002)

Giving Clear Information:- Ability to assess a situation, determine the objectives, and give
clear, concise, well-organized, convincing messages that will best meet the objective and
includes the following skills: overcoming physical, psychological, and semantic barriers in our
interactions with others; keeping on target and avoiding digressions; using persuasion
effectively; maintaining climate of mutual benefit and trust. (Jean Miller, MAP 2013)

Training, Coaching, and Delegating: - Ability to develop people. Includes the following skills:
selecting the right people; reaching agreement on plans for action; keeping a balance between
input and output; transferring responsibility to the employee; giving feedback effectively;
providing appropriate rewards. (Benjamin, James 1993)

Appraising People and Performance: - Ability to carry out a constructive performance-

appraisal involving joint evaluation of past performance, agreement on future expectations, and
development of a plan to see that these expectations are met and also, the ability to give effective
feedback on an ongoing basis. (Anne von Elverfeldt, 2005)

Making Decisions, Weighing Risk:- Ability to construct a decision matrix that helps to examine
options; identify limits, desirables, and risks to be considered; assign weights to each alternative;
and select the best option for meeting the desired goals and standards. (Jean Miller, MAP 2013)

1.9 Organization of the Study

The research paper is organized with the view to provide readers with cohesive information on
the research undertakings. Accordingly, the research paper is constituted from five main
chapters.

In the first chapter the thesis focuses on providing readers with background information on the
study conducted. In this part, preliminary introduction, statement of the problem, basic research
questions, objectives of conducting the study, scope and significance of the study as well as

6
research design and methodology with definition of terms will be addressed. Besides,
organization of the research report, time schedule needed to conduct the study and accompanying
budget will also be presented.

In chapter two, provides the necessary literature on the research topic. By so doing research
conducted on women entrepreneurs, factors affecting their performance, social and demographic
constraints faced by women entrepreneurs will be covered. In line with this, research made on
women entrepreneurs in America, Asia, Africa and Ethiopia are thoroughly consulted and
extracts from the same are part of the research document.

In chapter three, research design, methodology such as study area, constraints faced by women
entrepreneurs. Besides, population of the study, sample and sampling techniques, data collection
methods, instrumentation and data analysis scheme is painstakingly addressed.

In chapter four, the paper presents analytical review of the study using statistical tools like charts
and graphs is presented. In connection with this, data and information like demographic,
educational background, sectors with in which women entrepreneurs involved, summarized and
analyzed factors affecting their performance is provided for readers understand the findings of
the research task.

Last but not the least, in chapter five; the paper presents readers based on chapter four findings,
conclusions and recommendations reached at. In this chapter, recommendations and possible
intervention measures by the concerned stakeholders is enumerated.

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 CHAPTER TWO

RELATED LITERATURE REVIEW

2.1 Definitions of Entrepreneurship

The classical and neo-classical theorists are trying to define entrepreneurship however; there is
no single definition of Entrepreneurship that serves as a tailored vocabulary. The definition given
by theorists so far all depends on the focus of the one defining it and from which perspective one
looks at it.

(Bulla, 2012) looked at entrepreneurship from the management perspective, while others look at
it from the social perspective. Entrepreneurship is therefore a multidimensional concept. For
instance, (Catarina, 2012) was the first economist to acknowledge the entrepreneur as a key
economic factor. Catarina saw the entrepreneur as responsible for all exchange and circulation in
the economy.

(Say, 2001) regarded the entrepreneur as a manager of a firm; an input in the production process.
Rather than emphasizing the risk-bearing role of the entrepreneur. (Hebert & Link, 1988) also
stressed that the entrepreneur’s principal quality is to have good judgment.(Schumpeter, Sahlman
& Stevenson, 1991) defined entrepreneurship from the economics perspective by focusing on the
perception of new economic opportunities and the subsequent introduction of new ideas in the
market.

From the above brief introduction, it is safe to say that there are various perspectives and basis of
defining entrepreneurship. Hence, entrepreneurship is the process of discovering new ways of
combining resources to generate profit. In the subsequent pages, the study will show these
perspectives in detail.

2.2. Theories of Entrepreneurship and Perspectives

Various books and literatures written on entrepreneurship asserted that Entrepreneurship is one
of the resources needed for production and transformation process and thereby serving as sources
of new and innovative ideas.

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The study of entrepreneurs as individuals analyzes the variables that explain their appearance,
such as personal characteristics, the psychological profile like the need for achievement, the
capacity to control, tolerance of ambiguity and a tendency to take risks or non-psychological
variable such as education, experience, networks, the family, etc. Hereunder are some of the
excerpts of various literatures on entrepreneurship.

The entrepreneurial factor (Álvaro, 2008) is understood to be a new factor in production that is
different to the classic ideas of earth, work and capital, which must be explained via
remuneration through in-come for the entrepreneur along with the shortage of people with
entrepreneurial capabilities. (Alvarez & Busenitz, 2001) the theory of the entrepreneurship
focuses on the heterogeneity of beliefs about the value of resources.

(Shane and Venkataraman, 2000) the entrepreneurial function implies the discovery, assessment
and exploitation of opportunities, in other words, new products, services or production processes;
new strategies and organizational forms and new markets for products and inputs that did not
previously exist.

(Reynolds, 2005) Entrepreneurship – the entrepreneurial function - can be conceptualized as the

discovery of opportunities and the subsequent creation of new economic activity, often via the
creation of a new organization.

(Miller,1983) entrepreneurial behavior is seen as actions that manage to combine innovation,

risk-taking and pro-activeness. (Schumpeter’s, 1934, 1942) combines the classic theories of
innovative entrepreneur, the risk-taking entrepreneur that occupies a position of uncertainty as
proposed by (Knight, 1921), and the entrepreneur with initiative and imagination who creates
new opportunities.

All this explains why entrepreneurship is described in different ways. (Stevenson and Jarillo,
1990) entrepreneurship is a process by which individuals either on their own or within
organizations pursue opportunities.

(Lee and Peterson, 2000) have recently been claimed that if the managers and businesspersons of
many of our firms were to adopt entrepreneurial behavior when developing their strategies, firms
would be facing a much brighter future than current perceptions suggest.

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Therefore, there are three basic ideas that explain the manifestation of entrepreneurial activity.
The first focuses on the individual, in other words, entrepreneurial action is conceived as a
human attribute, such as the willingness to face uncertainty (Kihlstrom and Laffont, 1979)
accepting risks, the need for achievement (McClelland, 1961) which differentiate entrepreneurs
from the rest of society.

The second fundamental idea emphasizes economic, environmental factors that motivate and
enable entrepreneurial activity, such as the dimension of markets, the dynamic of technological
changes (Tushman and Anderson,1986), the structure of the market normative and demographic
(Acs and Audretsch, 1990) or merely the industrial dynamic.

The third factor is linked to the functioning of institutions, culture and societal values. These
approaches are not exclusive (Eckhardt and Shane, 2003), given that entrepreneurial activity is
also a human activity and does not spontaneously occur solely due to the economic environment
or technological, normative or demographic changes. As different scholars above expressed their
perspective the researcher perceive that, all in one, entrepreneurs are a very important factors
(like Land, Capital and Labor) of production of a given country and are prime movers.

2.2.1 Mises: Entrepreneurial As Mental Act

(Mises, 1881) entrepreneurship is the comparison of the forecasted future state of the world
which the actor expects to occur in the absence of his specific action with the newly made and
previously unnoticed or unforeseen forecasted future state of the world which the actor expects
to result from his specific action, and the taking of the specific action by the entrepreneur to
achieve his preferred future state of the world.

According to Mises, human action is characterized by the possibility of mistakes, which results
in market maladjustments. These, in turn, provide profit opportunities for those who decide to
take the necessary risk and seek to rectify these maladjustments. In addition, human decision
making is composed of two elements namely maximizing and entrepreneurial. The maximizing
element is directed at the optimal use of resources.

The entrepreneurial element identifies potential ends and available means for the attainment of
the chosen ends (Kirzner 1986). The latter has a speculative character and defines a special
participant in the market, called entrepreneur.

10
This agent deals with the uncertainty present in the market. He provides direction to other market
participants by directing production and factors of production towards definite goals (Mises
1949). He selects those ends based on market data, which he interprets. His success is
determined by his capacity to serve the consumers, anticipating their needs. In order to be
capable of doing his task, the entrepreneur needs certain qualities, such as judgment, foresight
and energy. These qualities cannot be given by education or training (Mises 1949). A person
proves himself to be an entrepreneur only by seizing an opportunity and succeeding in his task.

He must also compete with fellow entrepreneurs, and only the most able will succeed in their
enterprise. The surplus resulting from the enterprise is divided among several parties. However,
the greatest part of this surplus were not be assigned to the entrepreneur but to other non-
entrepreneurial parties (Mises, 1949). For his success, the entrepreneur is rewarded with profit
defined as the value of the result attained less the value of the sacrifices made. Profit is obtained
only once, after the completion of his task (Mises, 1949). His success is reflected in the economy
as a whole. The greater the dimension of entrepreneurial success, the more general welfare
improves (Mises, 1949). The entrepreneur is thus a key element of economic advancement and
through it of human evolution. Thus, in light of the above Mises suggestion, the author perceived
entrepreneurs as ahead thinkers by visualizing opportunities differently as way forward for
improvements and which their ultimate goal is.

2.2.2 Kirzner: The Universal Entrepreneur

Kirzner’s research was greatly influenced by the work of Mises, of whom he was a disciple. As
he clearly explains in his book Discovery and the Capitalist Process (1985), he tries to create a
view that lies between the neo-classical ideas of T.W. Schultz and the more advanced ones of
Shackle.

Schultz viewed the entrepreneur as the agent with the function of “relocating resources under
conditions of disequilibrium” in a world ruled by equilibrium (Kirzner, 1985). Shackle, departs
from all other researchers and defines entrepreneurial activity as an action of choice, which “is
an originative and imaginative art” (Kirzner, 1985). Therefore, there is a limit to rationality and,
choice and reason have different natures and functions. Reason doesn’t perform the selection. It
serves the chosen purposes.

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(Kirzner,1985) proposes to accept the concept of equilibrium, augmented with the idea of human
alertness to opportunities for pure profit. The combined result is entrepreneurial discovery.
Decision is the sum of calculation and an entrepreneurial element, which is creative. Calculation
relates to a constrained maximization problem and has an allocative function (Kirzner, 1985).
The entrepreneurial element results from the individual knowing that he is partially ignorant.
This entrepreneurial element is a scarce resource that needs special treatment. It cannot be stored
and it is costless (Kirzner, 1985).

(Kirzner, 1985) extends the idea to each human action, as a way for individuals to deal with
uncertainty. The entrepreneur, its leadership, alertness, initiative and drive thus drive the market
process. Its scope is defined by the possibility of discovering error.

This entrepreneurial process has two meanings. In the short-run, it is competition. In the end, it is
discovery, invention and innovation. This has great significance for the development of a
nation’s economy, which Kirzner defines as “the interaction of innumerable individual acts of
mutual discovery” (Kirzner, 1985). In a closed world, economic growth depends on postponing
resources that is on savings. In an open world, uncertainty plays a role and the mistakes of some
players leave room for further discovery (Kirzner, 1985). In this way, entrepreneurs not only use
dispersed knowledge, but they actually produce knowledge by transforming it from being at the
individual level into a new form of quasi-knowledge that exists at market level (Koppl, 2003).

The investigator understands that one can learn from Kirzner’s theoretical view that
entrepreneurs holistic traits line innovation, invention, risk taking, initiation which symbolize as
major actors in the society to move the economy extra mile in systematic way. Therefore, the
market economy of one country is depending on their resourceful activities.

2.2.3 Schumpeter: The Innovative Entrepreneur

(Schumpeter, 1989) in his book: the discovery and opportunity theory of entrepreneurship
(equilibrium destruction theory) Schumpeter looks at entrepreneurship as innovation and not
imitation. Schumpeter's innovator as an economic and social leader does not care much about
economic profits and only joy he gets from being an innovator and being a server to his society.
Schumpeter’s entrepreneur is an innovator in the entrepreneurship arena. In the Schumpeterian
theory, the entrepreneur moves the economy out of the static equilibrium.

12
(Schumpeter, 1955) in order to achieve this, he defines development as “changes in economic
life [that] are not forced upon it from without but arise by its own initiative” However; factors
such as population growth or the accumulation of wealth are not considered because they are not
new phenomena.

Development in this sense is a spontaneous disturbance of an equilibrium state, and leads to a

new equilibrium point. Each process of development creates the conditions for the following,
and relates to the industrial and commercial sphere rather than the sphere of households as
consumers of final products. The producer initiates the change and educates consumers if
necessary.

Entrepreneurship has several characteristics (Schumpeter, 1955). First, it is not a profession or a

lasting condition and its function cannot be inherited. Second, entrepreneurs do not form a social
class, although, they can attain an elevated class position thanks to the success of their enterprise.
Third, actual entrepreneurs are less numerous than those who have the possibility of being one.
They are thus a special Type and their behavior a special object of research.

Leadership is the defining quality of entrepreneurship as a distinct function, because it allows

them to step outside the boundary of routine and create a new combination. They must plan, but
their plans are prone to more and different errors than those occurring in customary actions.
Therefore, their successes are based on intuition and on a capacity to see things that afterwards
prove to be true, a capacity that allows them to grasp the essential and discard the inessential.
Their psyche is therefore different in that they must not only have the vision of a new
combination but also the will to carry it out. They must have the capacity to challenge an
environment that is hostile to innovation, particularly those who are threatened by it, as well as to
win over consumers. This allows us to understand why when entrepreneurs move up the social
ladder, they are usually not welcomed there (Schumpeter, 1955). Thus, they are usually more
self-centered than other types as they rely less on tradition.

Experience also teaches that entrepreneurs usually retire “when and because their strength is
spent and they feel no longer equal to their task” (Schumpeter, 1955).

Regarding the development of the entrepreneurial function, Schumpeter explained that in earlier
pre-corporate times the entrepreneur was also the capitalist, his own buying and selling agent, the

13
head of his office, his own personnel manager and the technical expert. Schumpeter noted how
J.S. Mill had failed to distinguish between the capitalist and the entrepreneur because in his times
the manufacturer was usually both, but how J.B. Say had correctly defined the entrepreneur.

The researcher believes that Schumpeter sees entrepreneurs as unique individuals with their
intuition on leadership as extraordinary, their decision is peculiar, their characteristic on how
they scan the environment is sharp, their tolerance to challenge is exception and as whole, they
are devoted to fulfill their vision despite any obstacle they might face.

2.2.4. High: The Entrepreneur as Originator of Institutions

(High, 2009) applies both ideas: he extends the concept of entrepreneurship beyond market
boundaries and defines an entrepreneur as the originator of an institution such as the division of
labor, monetary accounting and private property. His entrepreneur combines the properties of
Mises', Schumpeter and Kirzner's definitions. From Mises, he considers the entrepreneur as a
bearer of uncertainty inherent in every action. From Schumpeter he adds the introduction of a
new combination and from Kirzner the alertness to opportunities for gain.

(Andrea, 2010) the entrepreneur is therefore defined as someone who bears the uncertainty of
action and who by means of his alertness to opportunities introduces a new institution. High
considers three steps in the formation of an institution, meaning the establishment of a common
practice, as an entrepreneurial process. First, the introduction of a new practice by the
entrepreneur. Second, other members of the group learn and judge the new practice. Third, early
adopters implement the new practice through imitation and persuasion, establishing a new
institution. He gives the example of a hunter who introduces a new weapon and becomes a better
producer of meat. Other hunters observe him and evaluate the new weapon. Once satisfied of its
advantage the practice is extended to the whole community and a new institution is established.

(High,2009) proceeds to explain how the division of labour, monetary accounting and private
property appeared thanks to the existence of some entrepreneurs who saw each of them as an
opportunity to increase efficiency. This extension, together with Holcombe’s view of the
entrepreneur, bears great importance in the development of a comprehensive economic theory as
it allows for the explanation of different institutions that have appeared through time and history.
According to High, the author observed that entrepreneurs are inventors of new institutions and
economic endeavors.
14
2.2.5 Biological Theory of Entrepreneurship
According to (Eagly:1995) several of the academic theories of gender differences offer
explanations based on deeply seated cultural or even biological differences between men and
women. Other especially role-based theories emphasize that gender differences in behavior
should be expected to change along with other social changes. Moreover, even theories of more
stable gender (Udry, 2001) differences generally also admit the co-existence of more malleable
gender differences.

A more promising recent line of research has suggested that entrepreneurs differ in cognitive
style from others and that they may be more likely to make particular cognitive errors (Baron,
1998; Kahneman and Lovallo, 1994; Palich and Bagby, 1995), especially errors of
overconfidence. Psychologists have documented moderate and consistent levels of differences
between men and women in risk-taking behaviors.

2.3. Entrepreneurship in Africa

Forbes: (2014) has never been a more inspired generation of young Africans Entrepreneurs.
Entrepreneurs are builders, innovators and risk takers are fervent in their resolve to transform the
continent. They are solving critical socio-economic problems, exporting African culture to the
world, creating job opportunities for Africans, retelling Africa’s stories, and writing the future.

Africa’s brightest young entrepreneurs (Mfonobong Nsehe,2014) are the ones who are making
the most dramatic impact in Africa today in manufacturing, technology, real estate, media &
entertainment, financial services, agriculture, fashion and the service industry.

According to The Global Entrepreneurship Monitor GEM (2012) report, Entrepreneurship has
never been more relevant than in sub-Saharan Africa (SSA), where huge change is taking place
and where the growth in the Gross Domestic Product (GDP) per capita is one of the highest in
the world, albeit from a very low base.

High poverty and unacceptable levels of unemployment are prevalent in most African countries
and some of these problems may be addressed through entrepreneurial activity. While
entrepreneurship may not be a panacea, it can most certainly form part of the solution.

15
Academics and policy makers agree GEM (2012) those entrepreneurs, both young and old and
the new businesses they establish play a critical role in the development and well-being of their
societies. As such, there is increased appreciation and accounting for the role played by new and
small business in economy.

2.4. Women Entrepreneurship in Ethiopia

In her recent graduate thesis (Astede, 2014) confirmed that there is a scarcity in academic
literature that focuses on identifying this gap. This affirms to Lerner’s view (Lerner, 1997) that
like most of other developing countries, professional inquiries conducted regarding women
entrepreneurs are minimal here in Ethiopia. On the contrary, research on women entrepreneurs is
extensive in developed countries.

According to Ethiopian (CSA, 2004) almost 50% of all new jobs created in Ethiopia are
attributable to small businesses and enterprises, and roughly 49% of new businesses that were
operational between 1991 and 2003 were owned by women.

(Aregash ,2005), 98% of business firms in Ethiopia are micro and small enterprises, out of which
small enterprises represent 65% of all businesses. More than half of all women entrepreneurs in
Ethiopia often face gender related challenges related to establishing new businesses as well as
operating or expanding existing businesses (Amha & Admassie, 2004). Women are
disadvantaged due to culture, religion and tradition. For instance, many women face difficulty in
raising credit finance from banks as well as borrowing via informal networking.

Even though some attempts are done to uncover factors affecting the performance of women
entrepreneurs in Ethiopia, scope of the studies made are very narrow to draw some conclusion on
a national scale.

This notion is attested in many African countries. (Hannah, 2012) confirmed that over the past
several years’ people have become increasingly aware of the need to focus on entrepreneurship
development as a more specific objective in the support of women in developing countries.

(Eigen,1992) further the effectiveness of women entrepreneurship development programs

however has been hampered by fact that people are still putting too much emphasis on gender
and not enough emphasis on entrepreneurship as such . Policy and intervention measures like
gender mainstreaming, nevertheless, commendable endeavor, it will take a more relentless effort
16
to economically empower women here in Ethiopia. This is because, women are not only nurture
of generations they are also breadwinners of most of the households.

It is attested also (Jobs Gender and Small Enterprises in Africa, 2003) that despite the financial,
cultural and other disadvantages faced by women entrepreneurs in Ethiopia, they were able to
generate an average of 4.8 per enterprise per each small and microenterprise

Various international studies conducted to uncover factors affecting women entrepreneurs.

Internationally conducted studies identified various factors that have significant effect on
performance of women owned businesses.

According to (Lerner M., Brush: 1997), factors such as social learning, human capital, network
affiliation, motivations and goals, demographics and environmental factors are expected to have
an effect on the performance of the female owned businesses.

Although many admit to accessing microfinance without any problems, just as larger enterprises
are able to attract loans from commercial banks (Zewde & Associates,2002), when it comes to
finding appropriate funds to finance business growth, there would appear to be a “missing
middle” to finance the progression from informal to formal, and from micro-level to small and
medium-scale enterprises.

Furthermore, there is also evidence that different structure of work, family and social life affect
women entrepreneurs differently when they start up a business (Truman and Allen, 1993). In
Ethiopia, women’s entrepreneurs are also expected to effectively carry out housing chores.
Despite the challenges mentioned above women are increasingly yet steadily joining the
entrepreneurship arena.

Globally, women have started businesses in significantly greater numbers over the past two
decades, though; gender inequality in entrepreneurship continues to be pronounced when
compared to the traditional labor market (Aldrich 2005; OECD 1998). For example, in 2005,
women comprised 56 percent of professional and technical workers and 42 percent of legislators,
senior officials, and managers (UNDP 2008).

By contrast, in the same period, women were majority owners of only 30 percent of all privately
held US firms (Center for Women's Business Research 2004). Even when taking into account

17
income, wealth, industry and standard demographic and human capital factors, men are still
about twice as likely as women to pursue business creation as a labor-market strategy (Kim,
Aldrich, and Keister 2006).

Further, according to (State of Women-Owned Businesses Report: 2014), commissioned by

American Express OPEN, women in the United States of America are starting 1,288 (net) new
businesses per day, which is double the rate from only three years ago.

According to New York Times (2012) women, entrepreneurs drive growth in Africa. Marcelo
Giugale World Bank (2012) director for poverty reduction and economic management for
Africa, In Africa, you see women working a lot, they are very active in the labor market nearly
two-thirds of women are participating in Africa’s labor force.

In Ethiopia, according to the survey conducted by ILO (2003), 44 per cent of women
entrepreneurs are engaged in services, 30 per cent in trade, 15 per cent in production, and the
remaining 11 per cent in both trade and handicrafts. It was also observed that they have created
employment opportunities for themselves and others.

Zewde & Associates (2002) among the motivating factors for Ethiopian women entrepreneurs
are desire to be self-employed and to become independent, income generation and to support the
family, an interest in the line of work and to exploit an opportunity, training and entrepreneurial
qualification in the business area, encouragement from family and friends to go into a business
and relatively favorable policy environment.

Further more, a recent study by the (UNDP, 2014) Regional Bureau of Africa found that the
gender gap costs Africa 60 billion USD in potential output each year. That figure equals about
half of the global ODA last year. According to Director of Federal Micro and Small Enterprises
Development Agency Mr Gebremeskel Challa, 30% of small and medium sized enterprises are
either managed or owned by women, (FeMSEDA, 2014); he also stressed that, this force needs
to be assisted and its capacity needs to be developed.

18
2.5 Conceptual Framework

The conceptual framework relationships among the factors studied schematically presented in the
following conceptual framework.
Features Economic Factors
Demographic factors
 Age group  Financial access
 Family size  Life span of business  Market access
 
 Family responsibilities
Education & Training Business
 Work Experience development
 Sector of business  Marital status training
operating  Premises
 Employment  Information
opportunity access
 Legal status of  Managerial skill
business  Technology
 Operation year of Women Entrepreneurs
 Market
Business Performance
Competence
 Business initiation
 Source of start-up
capital Social Factors
 Marital Status
 Social acceptability
 Network with outsider
Leadership Challenges:  Prejudice or class bias
 Society Employee
 Recruiting/retaining attitude
employees  Workforce relation
Legal & Administrative factors
 Raw-material availability  Gender role conflict
 Expensive Employee  Gender inequality
 Support from Govt.
wage/benefit Cultural influence
 Network with Administrative bodies
 Insufficient funding  Tax levy on business
 Access to policy makers
 Restrictive business
 Legal, institutional & policy
regulation
constraint
 Shoplifting/theft
 Credit loan attached to collateral
Need or Usage of:  Interest Rate
 Bureaucratic & Red tape
 Business plan  Beneficiary of Govt incentive
 Financial Management  Unfavorable legal & regulatory
 Inventory Management environment
 Advertising/Marketing  Tax levy on business

Source: Journal of Management and Strategy (www.sciedu.ca/jms and researcher reckoning)

Based on United Nations Economic and Social Commission for Asia and the Pacific’s
(UNESCAP,) discussion paper, women in business generally fall into small, micro and medium
enterprises (SMMEs), either as managers or as owners from an employer’s angle. Performance is
the act of performing; of doing something successfully; using knowledge as distinguished from
merely possessing it.

19
However, performance seems to be conceptualised, operationalised and measured in different
ways (Srinivasan, 1994. The above digram shows women entrepreneurs performance is a
function of social, economic, legal and adminstrative factors, ability, leadership, motivation and
opportunity seeking. The picture also depicts the intraction among like economic, culture,
demographic, legal and adminstrative factors affecting women entrepreneurs in Addis Ababa. It
also shows the challenges and strategic support that need to be provided to them by all concrned
stakholders.

20
 CHAPTER THREE

RESEARCH DESIGN AND METHODS

3.1 Research Design

In an attempt to draw some conclusion, a descriptive research design is employed in the study to
assess and know the key factors that affect the performance of women entrepreneurs in Addis
Ababa.

The rationale for choosing this method is to attempts to explain while providing additional
information about the research topic. This is where research is trying to describe what is
happening in more detail, filling in the missing parts and expanding understanding on the theme.
Thus, the research design is effectively enumerate and explain the prevailing factors that affect
the performance of women entrepreneurs here in Addis Ababa.

The study is aimed at examining constraints faced by entrepreneurs and how the entrepreneurs
have responded. Thus, to achieve this goal, the qualitative data, which is used to gather
information on the relations between various variables of the study and further present some data
in form of statistics and aggregated ones, is collected through questionnaire. The research design
will also utilize both quantitative and qualitative techniques.

3.2 Study Population

A descriptive survey research design is employed in the study to assess the key factors that affect
the performance of women entrepreneurs in Addis Ababa. The reason for using this design is that
it enables to describe the different factors that affect the performance of women entrepreneurs in
as they are. As there is no census data on women entrepreneurs in Addis Ababa, the study targets
population consisting of 100 Women Entrepreneurs whose business is operating in different
sectors (Trade, Manufacturing, Import Export, Services, and Handicraft) here in Addis Ababa.

3.3. Sample Size and Sampling Technique

Gerrish & Lacey (2010) sample is a subset of a target population, normally defined by the
sampling process. So as to get a reasonable sample size, a 95% level of confidence and a 5%

21
confidence interval was used to select a sample of 79 women entrepreneurs in Addis Ababa were
taken.

Depending on the time and budget constraint and for necessary degree of precision the target
population size is 100 women entrepreneurs are randomly selected from Addis Ababa Women
Entrepreneurs Association (AAWEA), Alliance of Women Entrepreneurship Program (AWEP),
Ethiopian Women Exporter’ Association (EWEA) and others selected from different market
areas and service centers of sub cities of Addis.

The estimated proportion expects to achieve accuracy or level of accuracy is 50%. The
confidence level how much sure can be is 95%. The confidence interval or error value required
is 5%. For selecting these samples of entrepreneurs, are classified in five key sectors as a
stratum to give equal chance to each of the sectors. The aforementioned technique is opted as it
enables the study to generalize findings and make inferences from the sample, thus enabling to
draw sound conclusions.

3.4 Data Collection and Instrumentation

Data is obtained from primary sources, which included direct interaction and interview schedules
with various respondents; and secondary sources mainly from books, research dissertations,
publications of Ethiopian Central Statistical Authority (ECSA), journals, other documents on
entrepreneurship and related literature. In this research process, questionnaire is the main method
used to collect primary data, hence, open-ended and structured questionnaires is administered to
ensure that information received from the respondents is relevant to the research.

3.5 Data Analysis Methods

Data from the respondents is analyzed and translated into useful information using percentages
and excel based templates were used. Frequency distributions and tables are used to draw
conclusions. After the data is collected, coded and fed to excel sheet to simplify further tasks.
Furthermore, both descriptive statistical techniques and descriptive narrations were used to
elaborate data gathered. Larket scale is used to gauge how respondents view the severity of
factors affecting their performance. The demographic profiles and items related to features of
women entrepreneurs are analyzed using simple statistical tools such as tables and percentages.

22
In an attempt to provide answer to research questions, variables like economic, social and
cultural, legal and administrative are considered. Besides, challenges like recruiting and
retaining, raw material availability and supports sought etc… are taken in to account. Hence
descriptive statistics (mean and standard deviations) of the respondent scores is computed for
analyzing by comparing mean scores and deviations among respondents.

3.6 Ethical Considerations

Gerrish & Lacey (2010) research is viewed as a scientific human endeavor organized according
to a range of protocols, methods, guidelines and legislation. Rogers (2008) research ethics 16 is
that domain of enquiry that identifies ethical challenges with a view to developing guidelines that
safeguard against any harm and protects the rights of human subjects in research.

Thus, the researcher will provide information to keep the confidentiality of the respondents’
information, their email and telephone address so that to use solely for this particular study.
Cormack (2000) the principle of veracity or truth telling is inherently important and the
researcher will show this by telling the subjects the aim of the research and proposed outcomes.

Thus, researcher has indicated the subject matter and dedication of confidentiality through the
tools arranged. Finally, as the predicated on the ethical principle of beneficence, the researcher
strived to maximize the benefits that this study gives to women entrepreneurs’ community.

23
 CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1. Women Entrepreneurs Profile

In this part, the study presented data and respective analysis carried on the basis of actual
responses obtained. Although the required sample size for the intended study is 79 the actual
response obtained is 68 which are eight-six (86.6%) percent. Subsequent data, presentation,
analysis and interpretation are based on the actual responses.

Hence, in this part of the study, profile of women entrepruners interms of age, educational
background, and work expreince in Addis Ababa among others.

As it is presented in the pie (fig.1) chart underneath the mainstream (41%) of respondents are
between ages of 31-40.The next entrepreneurial age group lies between the ages of 40-51(38%).
Besides Entrepreneurship tendency in women of the age between of 21 and 50 signifying that,
women entrepreneurs in Addis Ababa metropolitan are in this age group. Furthermore, the chart
(fig.1) depicts that women interviewed are potentially of an age where they are economically
active and likely to be involved in undertaking family care responsibilities. A related study
conducted by ILO (2003) presented that over eighty-nine (89%) percent the women
entrepreneurs in Ethiopia were under the age of 50.

Respondents Age
2%
Below 20 Years
19% Between 21-30 Years
38% Between 31-40 Years
Between 41-50
Above 51
41%

Figure 15: Respondents Age Group

24
A Government survey of Ethiopian women entrepreneurs in the informal sector showed that the
majority (59 per cent) of those interviewed were illiterate, with only 20% percent having
received elementary education (CSA, 1997).

Regarding the level of education and training, majority of the respondents(fig.2), that is, 41% of
them are grade 10 complete and the other 35% of them are Bachelorette of Arts or Bachelorette
of Science (BA/BSC) and above. In addition, other 13% and 7% of them are 10+1 &10+2 and
10+3/diploma respectively. There remaining 4% are either grade 1-9 and or cannot read and
write.

Besides, By contrast, study made by ILO Sub Regional Office (2003) shows that 90 per cent of
microenterprise owners, and 88 per cent of small enterprise owners report that they had had
formal education, with 72 per cent and 66 percent having received primary and secondary
education respectively.

In general, great number of the women entrepreneurs interviewed had taken some form of
qualified training in the form of college Diploma and or BA/BSc level of education. In this
respect, the women entrepreneurs would appear to have been literate enough to manage or at
least learn how to manage their businesses. Hence, it is safe to say that respondents are relatively
better educated since 1997.

25
 Respondents Level of Education
45%

40%

35%

30%
Perecnatge

25%

20%

15%

10%

5%

0%
Can’t read and Grades1-9 Grades 10 10+1 &10+2 10+3/diploma BA/BSC and
write complete above
Education & Training

Figure 2: Respondents Level of Education

Respondents were asked about work experience prior to starting their own business. Accordingly
(see fig. 3), thirty five percent (35%) of them answered that they have10 years and above
experience while twenty-six (26%) percent of them replied they have 1-5 years of work
experience before starting their own business. Furthermore, twenty-four (24%) percent of them
had less than a year and the remaining fifteen (15%) of respondents claim to have 6- 10 years of
experience.

26
 Entrepreneurs Work Experience Prior to
Starting own business

Above 10 Years
Work Exprieance

6-10 years

1-5 years

Less than 1 year

0% 5% 10% 15% 20% 25% 30% 35% 40%

Perecnetage

Figure 3: Entrepreneurs Work Experience

Those with experience had gained it from a number of different sources. Interestingly, over a
half (50%) of the women had gained experience from running their own businesses (fig. 4), with
the majority gaining experience through involvement in a family business. Hence, the chart (fig.
3) shows that nearly seventy six percent (76%) of those responding said that they had substantial
work experience related to their business prior to start-up. However, it is essential to see that
critical number of (24%) women entrepreneurs has only less than one year of working
experience prior to starting own business. For the green entrepreneurs the necessary startup
support should be provided; as the saying goes experience is the mother of all teachers. Hence,
concerned stakeholders need to work providing strategic support for both green and established
business.

With regards to the question posed to the respondents on how long is their business life since the
date of its establishment; (see fig.4)51% of them have between 1-5 years, 15% of them have less
than 1 years; 12% of them have are in 6-10 years as well as another 12% eleven to 20 years in
business and the next 10 % of them has got more than 20 years of experience.

The reader need to note that the study shows that a considerable number 66%) of women
entrepreneurs businesses are less than five years in existence.

27
 LIFE SPAN OF THE BUSINESSES

Greater than 20 years

11-20 Years
Business Life

6-10 years

1-5 years

Less than 1 year

0%
10%
20%
30%
40%
50%
60%
Perecentage

Figure 4: Business Life Span

The fact that sixty-six (66%) percent of women entrepreneurs businesses are less than a five
years in existence implies that the business are under the incubation period which requires
stakeholders to play their role so that the social and economic benefit from each business under
this age group is fully realized.

In this regard, women entrepreneurs’ survival could be enhanced through the provision of
strategic as well as operational support and guidance.

Previous study (Zewde & Associates, 2002) conducted here in Ethiopia have shown that the
majority (63.4%) of women business owners are or have been married. In like manner, for this
study (fig.5) an attempt has been made to know marital status of women entrepreneurs in Addis
Ababa.

As such, the respondents revealed that 59% of them are married, 28% of them are single and 9%
are divorced and 4% are widowed. The current study and the previous study showed the majority
(59%) of women entrepreneurs under study are married showing that they are not only business
owners but also are responsible citizens as well as nurtures of the upcoming generation.
28
 Respondents Marital Status
4%
9%

Married
Single
28% Divorced
59% Widowed

Figure 5: Respondents Marital Status

Therefore, it is very important that women entrepreneurs are provide with the necessary support
so that they will be economically and socially empowered.

4.2. Features of Entrepreneurs

In order to know if women entrepreneurs respondents believe that family responsibilities affects
their performance in leading their business using by using Likert Scale Analysis Tool (fig.6)
25% of them strongly agree, 34% of the somewhat agree and 26% of them preferred to be neutral
and the remaining 16% of them somewhat disagree and or strongly disagree the notion that
family responsibility affects performance.

29
 Entrepruners View of Family Responsibilites

6% Strongly Agree
9%
Some What Agree
25%
Neutral
26% SomeWhat Disagree

34% Strongly Disagree

Figure 6: VIEWS OF RESPONDENTS ON FAMILY RESPONSIBILITY

This shows that the majority (59%) respondents are of opinion that the family responsibilities
have direct impact on their work performance. However, further study need to be conducted in
order to befittingly and specifically know how family responsibilities affect women
entrepreneurs. In similar manner, the study tired to know the size conducted elsewhere before
analyzing respondents’ situation under this study.

In line with this, the average national household size in Ethiopia according to the most recent
Government surveys is 4.8 persons (CSA, 1995). The average (mean and median) household size
of the women entrepreneurs surveyed was four (4) persons. Asked about their family (fig7) size
50% of the respondents replied that they have 4-5 family members. In addition, 33% have less
than 3 members and 16% of the have more than five family members. The subsequent chart
affirms that respondents’ opinion of the direct impact of the family size on their business
performance.

30
 Respondents Family Size

18%
32%
Less than 3

Between 4-5

More than 5

50%

Figure 7: Entrepreneurs Family Size

Given the culture and traditions, here in Ethiopia where women are primary responsible for
household chores, it would be safe to say that many (58%) fifty-eight percent of the women
entrepreneurs interviewed have significant domestic workloads alongside running their own
businesses.

This implies that entrepreneurs’ advocacy work need to be resumed to families of with the view
to minimizing and domestic workloads responsibilities.

Concerning the question asked to know sector in which women entrepreneurs operate; it was
learnt (fig. 8) that 35% of them are in trade, 33% in service, 13% in manufacturing, 13% in
handicraft and 6% import export sectors.

31
 SECTOR OF BUSINESS
6%

13% 35% Trade

Manufacturing
33% 13%
Services
Hand-craft
Import Export

Figure 8: WOMEN ENTREPRENEURS’ BUSINESS SECTOR

This shows that within the metropolitan most businesses are trade and services. This is a very
common (ILO, 2003) characteristic of smaller businesses throughout the world. The reasons
could be trading and trading businesses usually requires relatively minimum resources as well as
business expertise to start-up, and therefore are attractive as “easy entry” and lower risk
activities. Hence, it is wise to say that women entrepreneurs must be encouraged and supported
to further invest in manufacturing sector as the national priority agenda is to have export-led
industrial economy.

As an entrepreneur, the majority of the women entrepreneurs (some 85 per cent of respondents)
are engaged full-time in their businesses, that is, their businesses are providing them with full-
time employment. In many cases, the women’s businesses were also generating employment for
others fellow citizens. In line with this, the respondent’s answers for the number of employment
opportunity generated by their businesses, 53% of them have less than five employees, 21% have
more than 21 employees, 15% have 6 to 10 employees, 7% have between 11-15 employees and
4% of them have 16-20 employees.

32
 Table 1: Employment Generated by Women Entrepreneurs

EMPLOYMENT SIZE %AGE TOTAL

Less than 5 53% 36

Between 6-10 15% 10

Between 11-15 7% 5

Between 16-20 4% 3

More than 21 21% 14

TOTAL 100% 68

AVERAGE 13

As such, the mean employment opportunity generated by each women entrepreneurs is 14

implying that overall 68 companies has provided a total of 898 jobs. These figures support the
widely held view about the increasing role played by entrepreneurs as sources of new ideas as
well as enterprises as the generators of jobs.

However, due to lack of proper data and information availability at organization and national
level it was difficult to exactly show the trends. Besides, the chart (Table. 1) demonstrates that
women entrepreneurs can generate significant employment opportunities, and thereby contribute
to the alleviation of unemployment. This challenges the commonly portrayed the images that
women’s businesses as sole traders and informal type of enterprises.

Regarding the legal status of respondents business establishment, 66% of respondents have
established a sole ownership, 24% have private limited company, 7% have joint venture and
other 1% are agents and the other 1% other kind of business status.

33
 Legal Status Of Business Operated By
Women Entrepruners
70% 66%

60%

50%

40%

30%
24%
20%

10% 7%
1% 1%
0%
Sole ownership Private Limited Agent Joint Venture Other
Company

Figure 9: Entrepreneurs Business Legal Status

The above chart (fig.9) demonstrates that since the majority (66%) of the businesses are solely
owned eventually they lack not only resources need to expand the business but also the
advantage of having new partner that will further inject new business ideas and ways of doing
things which may ensure survival of the ventures.

As it can be observed from the chart(fig.11) below, the majority of respondents(54%) fifty four
percent of women entrepreneurs have from one(1) to ten(10) years in their business while
sixteen(16%)percent of the respondents are veterans that is to say they have been in business
from eleven(11) years to that of twenty one(21) and above.

Hence, it is safe to say that women entrepreneurship is a decade or so phenomenon implying that
as economy grow the role of women entrepreneurs’ role will steadily increase.

34
 Years of Business Operations
60%

50%

40%
Perecentage

30%

20%

10%

0%
Under 1 Year 1 – 5 Years 6 – 10 Years 11 – 15 16 – 20 Above 21
Years Years Years
Years of Operations

Figure 10: Years of Operations

The above chart (fig.10) shows that business incubation is one thing and survival is another. As
such the conclusion made by Eshetu Bekele and Zeleke Worku citing the works of Kebede,
Belay (2000) must be noted here. That is survival of a business firm is defined as the ability of
the firm to continue its operation and remain in business during a certain period of time in a
competitive market.

Based on a survey of 15 representative sites of study, Kebede (2002) has shown that only one in
three small businesses survive to their third anniversary, and that the likelihood of survival of
firms operated by women entrepreneurs is closely associated with the degree of support given to
women in terms of access to finance, improved skills and an enabling macroeconomic
environment.

Women entrepreneurs in the metropolitan, therefore, must be provided with the necessary
support so that their economic empowerment as well as contributions to the society will be
enhanced and fully utilized.

In line with this, assessment of respondents view of starting business(fig.11) reveals that seeking
freedom(31%),source of income(21%),sustaining family(15%) and reputation(12%) as a result of
being an entrepreneur are the main reason behind starting own business.

35
This show the reasons to pursuing course of entrepreneurship by metropolitan women in this
study is quite similar to that of studies conducted elsewhere.

For instance, study conducted by ILO (2003) on Ethiopian Entrepreneurs interest to starting their
own business includes business brings high income, the amount of investment required small and
to be self-employed.

Further, in this study, when multiple responses were taken into account, a similar profile of
preferences appeared with slightly more emphasis on seeking freedom (31%) and followed by
income generation (22%).

Table 2: REASONS TO START BUSINESS

RESEANS TO START BUSINESS %AGE TOTAL

To sustain Family 21% 14
Amount of investment is required is minimal 6% 4
Seeking freedom 31% 21
Use it as sources of incomes 22% 15
Reputation Brings high income 9% 6
Other Specify) 12% 8

TOTAL 100% 68

Whatever reason is provided to starting business, the issue that must be addressed here is the
economic empowerment of women. A national survey conducted by the Ethiopian Welfare
Monitoring Unit (2002) shows those women entrepreneurs in Ethiopia are not provided with
adequate policy related and strategic support from the government.

Furthermore, the promotion of vibrant micro and medium enterprise should be one of the most
important priority strategies for empowering women, addressing development issues and
unemployment in Ethiopia. Hence, the reason mentioned by respondents must be considered as
by all concerned stakeholders that it is an opportunity to empowering women economically and
socially as well as recognizing their fair share contribution to the national development agenda.

36
According to surveys conducted by the (World Bank,2005), the World Trade Organization
(2002), the Ministry of Finance and Economic Development of Ethiopia (2002), women
entrepreneurs in Ethiopia initiate new businesses and enterprises at a rate twice as fast as men.
The response to the query that who initiated and help start the business showed that forty-four
(44%) percent of the respondents say that they have got family support, twenty six (26%) of
claim that they are self-starters, ten (10%) percent replied business partners are the main causes
of striating own business.

Business Idea Initator

35

30

25
Perecentage

20

15

10

Myself Family Friend/partner From

Microfinance
Insitutions
Sources of Business Idea

Figure 11: Business Idea Initiator

The other considerable number (20%) responded that microfinance institutions helped them to
start their own company. The response depicts that the spirit of entrepreneurship among women
entrepreneurs in Addis Ababa is admirable. In connection with this, respondents were asked to
pinpoint who in the family is pursuing entrepreneurship (fig.12) and encouraged those by being
source of business idea 32% and 22% of them respectively answered mother and husband. The
rest of the family 13% father, sister 11% and sister 9% score indicates that entrepreneurship
tendency may also be inherited from family.

37
 Family Entrepuneral History
35%

30%

25%
Perecentafe

20%

15%

10%

5%

0%
Father Mother Brother Sister Grandfather Husband Other
Family Memebrs

FIGURE 12: FAMILY ENTREPRENEURSHIP HISTORY

Hence, it is safe to conclude that women entrepreneurs under this survey replied that they have
initiated and started the business idea by themselves as well as through the help of microfinance
institutions implying that there strategic support must be availed to women entrepreneurs so that
they will contribute to growth and development of the country. The role of microfinance
institutions institution as source of finance and business incubation venue need to be further
enhanced.

Women entrepreneurs in Addis Ababa were asked if they felt they had any prior work experience
related to their business before starting it. The majority (44%) of the women have had some form
of employment and / or business experience prior to running their own business.

The most plausible thing of the study is that a considerable number (26%), of entrepreneurs said
that they got the skill from formal training while some other respondents (19%) declined to reveal
sources of business skill.

38
 Sources Of Skill To Run The Business
35

30

25
Response

20

15

10

0
Through formal training From past experience From family Other
Sources of Skill

Figure 13: Skills Acquired to Run the Business

Moreover the study showed that experience and formal training (together 79%) are main sources
of skill to be an entrepreneur and be able to run own business.

Form the chart (fig.13) and subsequent analysis it sounds to say that formal training in the areas
of business entrepreneurship requires a lot of work as lacks quality to equip to engage
entrepreneurial arena. Besides, sustainability of the business created is ensured by making sure
that each entrepreneur continues to upgrade their skill as they operate in dynamic world where
technology and globalization is changing by minute.

Starting own business requires an initial capital in addition to having business ideas. The
following table shows the main sources of start-up fund. The respondents said that source of
finance to starting up is personal saving (50%), loan (18%) and eight (8%) percent loan from
microfinance respectively. The remaining fifty percent (19%) of the respondent decline to reveal
their sources of startup finance.

39
 Table 3: SOURCE OF FINANCE

%AGE TOTAL
SOURCE OF FINANCE
50% 34
Personal saving
18% 12
Borrowed from relatives or friends/money lenders
13% 9
Borrowed from Micro-finance institutions
9% 6
Assistant from friends/relatives
6% 4
Inherited
4% 3
Borrowed from Bank
TOTAL 100%
68

Saving is an important (50%) source of finance for starting up women entrepreneurs here in
Addis Ababa followed by borrowing (18%) from a relative or a friend. Further micro finance
institutions (13%) are also serving as sources of finance for women entrepreneurs here in Addis
Ababa.

Hence, this implies that the main source of startup is saving finance must be encouraged by all
concerned bodies.

On the other hand, formal financial institutions contribution in this regard is limited to startup
business at Micro/Small enterprise level. As citizens of this country we need to uphold the
traditional values that encourages lending a hand in times of need as 18% of startup finance
come from relatives.

4.3. Factors Affecting Women Entrepreneurs Performance

There are a number of factors that affect women entrepreneurs. The subsequent enumeration
herein addresses economic, social, legal and administrative factors that affect these
entrepreneurs.

40
 4.3.1. Economic Factors
Economic factors identified for this study are access to finance, market access, business development training, premises, access to information
access etc. Analysis on how economic factors are affecting women entrepreneurs in Addis Ababa using Likert’s Scale is presented below:

Table 4: Economic Factors

Total Responses Received 145 199 166 160 203 229 178 162 172 177
Total Possible Point 340 340 340 340 340 340 340 340 340 340
Mean 2.13 2.93 2.44 2.35 2.99 3.37 2.62 2.38 2.53 2.60
Standard Deviation 1.37 1.37 1.27 1.52 1.41 1.39 1.40 1.38 1.32 1.35
Variance 1.88 1.89 1.62 2.32 1.98 1.94 1.97 1.91 1.75 1.83
Response Rate 86.08%

Analysis Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10

Mean Score Increase? Yes No No Yes Yes No No Yes Yes No

% of Participants Gain 86.08% 86.08% 86.08% 86.08% 86.08% 86.08% 86.08% 86.08% 86.08% 86.08%
% who Disagree or Strongly
Disagree 56% 34% 49% 53% 32% 25% 39% 56% 46% 46%
% who Agree or Strongly Agree 21.52% 40.51% 27.85% 22.78% 41.77% 41.77% 36.71% 20.25% 32.91% 32.91%

1 2 3 4 5 6 7 8 9 10
I am satisfied I have I have I have I have an I have There is no Adequate I have
with the access access my own access to managerial stiff infrastructur access to
financial to to premises information skills competitions es are necessar
access given market different (land) to to exploit in the available y
to me by for my business run my business I have market place inputs(ra
financing products trainings business opportunities access to that I am w
institutions. necessary engaged in. materials
Questions technologies )
Source: Research Questionnaire Part 3

40
Ranking some of the economic factors that affects women entrepreneurs replied that they
strongly disagree or strongly disagree(each registering 56% response) of them to the assertion
that they are satisfied with the financial access given to them by financing institutions as well as
the judgment that there is no stiff competitions in the market place. In the same manner, women
entrepreneurs depressingly (53%) disagree or strongly disagree to the idea that they own
premises (land) to run their business.

The next economic factors identified to affect entrepreneurs views expressed as disagree or
strongly disagree that training, adequate infrastructures and access to necessary inputs (raw-
materials) available are registering 49%, 46%, 46% percent’s response respectively.
Furthermore, 39%, 34% and 32% of the respondents also disagree or strongly disagree that they
have access to necessary technologies, access to market for products and access to information to
exploit business opportunities.

As to respondents views of their managerial skill to running the business only 25% disagree or
strongly disagree that they have managerial skill. According to the study conducted by Eshetu
Bekele and Zeleke Worku (2008) applying Kaplan-Meier survival probability curves and the
Cox Proportional Hazards Model concluded that female business owners in Ethiopia are
significantly and adversely affected by each of the key factors as predictors of survival including
access to loan from commercial banks, poor managerial skills, and shortage of technical skills.
Hence, economic factors are severely affecting women entrepreneurs in Addis Ababa implying
that due intervention from the concerned bodies is long overdue.

4.3.2. Social Factors

For the purpose of this study social factors are:-

• Social acceptability
• Network with outsiders
• Prejudice or class bias
• Workforce relation
• Gender role conflict
• Gender inequality Cultural influence

41
Ranking some of the social factors that affects women entrepreneurs replied that they strongly
disagree or strongly disagree (registering 37%, 33% and 30% response) of them to the assertion
that they have no prejudice or class biases, encounter harassments in registering and operating
my business and the judgment that there is no have no cultural influences. In the same manner,
women entrepreneurs’ interestingly (30%) disagree or strongly disagree to the idea that not
affected by gender inequalities to run their business.

Social Factor Analysis

120.00%

100.00%
% of Participants Gain
80.00%
Perecentage

60.00%
% who Disagree or
Strongly Disagree
40.00%

20.00%
% who Agree or
Strongly Agree
0.00%
1 2 3 4 5 6 7 8 9 10
Questions

Figure 14: Social Factor Analysis

Source: Questionnaire Part 3

The next social factors analyzed to affecting women entrepreneurs’ performance like social
acceptability, network, prejudices or social bias, society’s attitude towards products and or
services etc…

The data analysis on respondents views expressed as disagree or strongly disagree that societies
attitude towards my products/services is positive, have better social acceptability, have no
conflicting gender roles consecutively registered 30%, 29%, 25% percent’s response.

Furthermore, 23%, 22% and 15% of the respondents also disagree or strongly disagree that they
have a better contacts (networks) with outsiders, attitude of other employees towards my
business is positive and have a positive relationship with the workforce.

42
As to respondents views of gender inequalities to running the business only 30% disagree or
strongly disagree that they are affected by gender inequalities.

Measure of Central Tendencies

4.00

3.50

3.00

2.50
Score

2.00
Mean
1.50 Stadandard Deviation

1.00

0.50

0.00
1 2 3 4 5 6 7 8 9 10
Question

Figure 16: Measures and Central Tendencies

Source: Questionnaire Part-3

Hence, a thoughtful review of the charts on social factors shows that out of the entire
respondents except few believe that social factors are impediments.

4.3.3. Legal and Administrative Factors

Ranking some of the legal and administrative factors that affects women entrepreneurs replied
that they disagree or strongly disagree (registering 53%, 52%and 50% response) to the assertion
that they are beneficiaries of government incentives, borrow money even without titled assets as
a collateral business assistants and receive supporters from government bodies.

In the same manner, women entrepreneurs’ interestingly (registering 47%,47% & 46%,47%)
response)disagree or strongly disagree to the idea that they have never faced unfavorable legal &
regulatory environments , have access to policy makers and have never encountered

43
bureaucracies, and red tapes to run their business as well as tax levied on my business is
reasonable.

44
Furthermore, 46%, 42%, and 35% of the respondents also disagree or strongly disagree that interest rate charged by finances
institutions is reasonable, have no legal, institutional and policy constraints, and have a network with different administrative bodies.

Table 5: Legal & Administrative Factors

Total Responses Received 173 184 169 175 143 165 164 157 166 158
Total Possible Point 340 340 340 340 340 340 340 340 340 340
Mean 2.54 2.71 2.49 2.57 2.10 2.43 2.41 2.31 2.44 2.32
Standandard Deviation 1.43 1.29 1.34 1.30 1.21 1.42 1.36 1.32 1.44 1.30
Variance 2.04 1.67 1.81 1.68 1.47 2.01 1.86 1.74 2.07 1.68
Response Rate 86.08%
Analysis Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
Mean Score Increase? Yes No Yes No Yes No No Yes No No
% of Participants Gain 86.08% 86.08% 86.08% 86.08% 86.08% 86.08% 86.08% 86.08% 86.08% 86.08%
% who Disagree or Strongly Disagree 50% 35% 46% 42% 52% 46% 47% 53% 47% 47%
% who Agree or Strongly Agree 34.18% 45.57% 32.91% 37.97% 27.85% 31.65% 31.65% 26.58% 27.85% 32.91%
1 2 3 4 5 6 7 8 9 10
I have I have a I have I have no I can Interest I have never I am I have never The tax
business network with access to legal, borrow rate encountered beneficiary faced levied on
assistants different policy institutional money charged by bureaucracies of unfavorable my
and administrative makers and policy even finances and red tapes government legal & business is
supporters bodies constraints without institutions incentives regulatory reasonable
from titled is environments
government assets as reasonable
bodies a
Questions collateral

The table (Tab. 5) shows that legal and Administrative factors continued to be barriers to women entrepreneurs in Addis Ababa
implying that making good governance a-day-today practice here in Ethiopia requires tremendous effort if not revolution.

44
4.4. The Science and Art of Leading Organizations Leadership
4.4.1. Business Challenges
Women entrepreneurs in Addis Ababa are experiencing business challenges like recruiting,
retaining employees, raw material unavailability, lack of access to utilities, rising employee
salaries and benefits, insufficient finance to run business operations as only few of the
respondents that is eight (8%) percent feel that they are able to recruit and retaining employee,
eight (8%) percent see that there is raw material unavailability, seven (7%) percent see lack of
access to utilities, ten (10%)percent see rising employee salaries and benefits and the next ten
(10%) percent responded that there is no insufficient finance to the business operations.

Women Entrepreuners Business Challenges

Shoplifting or theft
Restrictive business regulations
Types of Challenges

Insufficient financing
Expensive employee wages or benefits
Expensive or unavailable utilities
Expensive or unavailable Raw materials
Difficulty recruiting or retaining employee’s

0% 10% 20% 30% 40% 50%

Rate

Figure 16: Business Challenges

From the figure above (fig.16), the most business challenges faced by Addis Ababa women
entrepreneur is shoplifting that registered almost fifty percent (50%) of the business challenge
response.

The above chart (fig.16) shows that key business issues like human resources management, raw
material supply, and access to utilities, financing as well as restricting business regulations pose
challenges to women entrepreneurs implying that business establishment and operational
challenges need to be given due accordance by the concerned government authorities.

45
 4.4.2. Support Sought
For effective business operations women entrepreneurs in Addis Ababa expressed that they need
support from concerned stakeholders. Some of the support sought includes business planning,
financial management, business market analysis etc…The chart (fig.17) shows almost all of
women entrepreneurs said that they are unable to carry out business planning and market
analysis. Furthermore only one percent (1%) of the respondents has financial management skill.
Besides only four (4%) know how to make inventory management, the next six (6%) percent
know how to handle advertising and marketing management works. Furthermore among the
respondents only thirteen (13%) percent know how to recruit and retaining employee. The good
part of the analysis is that 25% of the respondents know well about customer service and
hospitality management.

Resopondents View of Assistance Needed

Internet or E-Commerce

Business market analysis

Customer service or hospitality

Assistance Needed

Employee hiring or training

Advertising or marketing

Inventory management

Financial management

Business planning

0% 10% 20% 30% 40% 50% 60%

Peresentage

Figure 17: Supports Sought

The above graph shows that the conclusion reached by Abegaz (2004) and Admassie (2004) ;
both attributed the lack of growth in the micro and medium enterprise sector to lack of strategic
support to women entrepreneurs, and to the poor level of support provided to the sector since
1991. The notion is attested reports by the UNCTAD (2003), the UNDP (2003) and Wole

46
(2004), the level of strategic support provided to women entrepreneurs in Ethiopia since 1991
has been grossly inadequate and vastly ineffective. Hence, one can infer that women
entrepreneurs in Addis Ababa are in need of provided with strategic support in the areas of
business planning, financial management, inventory management, marketing, employee hiring
and training, customer service etc.

47
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMENDTIONS

In this chapter, the findings of the study are summarized and conclusion is drawn based on the
findings. Furthermore based on the findings recommendations are forwarded so that the
concerned stakeholders can play their respective roles.

The study was conducted with the view to knowing factors affecting the performance of women
entrepreneurs in Addis Ababa metropolitan. In this regard, the study tried to address features of
women entrepreneurs as well as the respective support they need to overcome factor affecting
their performance.

A sample of 100 women entrepreneurs engaged in Trade, Manufacturing, Service, Handicraft

and Import-Export sectors are considered for the study using stratified simple random sampling.
In an attempt to providing, answer to the basic research questions a questionnaire that include
demographic factors, features of women entrepreneurs like family size and responsibility, sectors
in which they operate, employment opportunity they were able to generate, legal status of their
business and reasons to starting their own business.

Besides, a questionnaire aimed at knowing factors that affect the performance of women
entrepreneurs and the support they are looking from the concerned stakeholders were designed as
well as a close ended and Likert Scale analysis were applied

5.1. Summary of Findings

After having collected the necessary data simple statistical technique like table and percentage as
well as Likert Scale analysis are applied. Based on 68 respondents and results acquired the
findings of the study are summarized as follows:-

 Most of the respondents are under the age category of 31-40(41%) and educational level
of grade 10(43%) with working experience of Forty-one (41%) percent replied they have
6-10 years and above experience and fifty-nine (59%) percent of them had less than 5
years.

48
 The Majority (50%) of the respondents replied that they have 4-5 members; engaged in
Trade (35%) and Services (32%) followed by manufacturing (13%). They have also
provided opportunity generated by their businesses, 53% of them have less than five
employees, 21% have more than 21 employees, 15% have 6 to 10 employees, 7% have
between 11-15 employees and 4% of them have 16-20 employees. Women Entrepreneurs
in Addis Ababa have formed , 66% have established a sole ownership, 24% have private
limited company, 7% have joint venture and other 1% are agents and the other 1% other
kind of business status.

 The majority (74%) of the respondents stated their business for the reason that they seek
freedom, sources of income and sustaining family.

 The majority of respondents (54%) fifty four percent of women entrepreneurs have work
experience starting from one(1) to ten(10) years in their business while
sixteen(16%)percent of the respondents are veterans that is to say they have been in
business from eleven(11) years to that of twenty one(21) and above.

 Respondents’ obtained the necessary skill that enabled them run the business that is
obtained from formal training (26%), past experience (44%) and from family (10%)
business. Some of the respondents (19%) declined to reveal sources of business skill.

 The majority of women entrepreneurs (50%) used only their personal savings as sources
of financing their ventures. Besides from the respondents under study of those, (31%)
needed financing from relatives or friends/money lenders as well as Micro-finance
institutions for launching their business. Only (4%) used other sources, such as bank
loans.

 The major economic factors that affect women entrepreneurs according to their severity
order are lack of own premises or land, lack of financial access, training, lack of access to
technology, and raw materials. Infrastructure problems and access to information are
serious economic problems for women entrepreneurs in metropolitan.

49
  The major social factors that affect the respondent women entrepreneurs in Addis Ababa
according to their severity order are networking society, attitude towards local products
besides, positive relationship with the workforce, gender inequality, attitude of employees
to the business, and conflicting gender roles are among the serious problems that affect
the performance of women entrepreneurs.

 Only few of the respondents eight(8%) percent feel that they are able to recruit and
retaining employee, eight(8%) percent see that there is raw material unavailability,
seven(7%) percent see lack of access to utilities, ten(10%)percent see rising employee
salaries and benefits and the next ten(10%) percent responded that they have access to
finance.

 Almost all of women entrepreneurs said that they are unable to carry out business
planning and market analysis. Furthermore only one percent (1%) of the respondents has
financial management skill. Besides only four (4%) know how to make inventory
management, the next six (6%) percent know how to handle advertising and marketing
management works; Furthermore among the respondents only thirteen (13%) percent
know how to recruit and retaining employee. The good part of the analysis is that 25% of
the respondents know well about customer service and hospitality management.

5.2. Conclusion

The features of women entrepreneurs in Addis Ababa shows that they perceive entrepreneurship
as a means to sustain family, one way of empowering themselves (Seeking freedom) as well as
use it as sources of incomes.

Besides, the survey found out those women entrepreneurs in Addis Ababa are not only affected
by economic and social factors but also seriously constrained by lack of up to the standard
science and art of leading organizations which will also have impact on their future undertakings.

Despite these, women entrepreneurs are contributing for national economic development.
Women economic impairment is an important area of emphasis for many developing countries in

50
general and to Ethiopia in particular, primarily for its immense potentials as a source of
employment and nurtures of future business leaders.

Even though social factors are easing day by day in towns like Addis Ababa, legal and
administrative challenges are a still tremendous hurdle that continues to affect the performance
of women entrepreneurs.

The trained workforce is as important to women entrepreneurs or even may be more important
than the production of goods and services. Whatever is produced in the economy; Ethiopia to be
competitive, in the international markets, requires quality and productive workforce, which is
also highly sought by entrepreneurs in Addis Ababa. This obviously calls for education and
training system that supplies the business sector and/or the economic system with a quality
workforce that efficiently uses and produces resources.

5.3. Recommendations
Based on the findings of the study, the following recommendation is forwarded to women
entrepreneurs, Finances Institutes and Educational Institutions, Sectorial Associations and

 TO ADDIS ABABA WOMEN ENTREPRENEURS

The study reveals that the majority of the business legal status is sole proprietor that calls for
women entrepreneurs will power to support each other in terms of experience sharing as well as
making the businesses eventually evolve to company that is owned by more women’s in the form
of shareholders. This makes their dreams and effort to last for long. Besides, they need to look
for interested international women entrepreneurs and activists with the view to partnering or
getting the required support.

Furthermore, women entrepreneurs in Addis Ababa should search for other alternative
supporting local and international institutions rather than relaying only on financial institutions to
enhancing their performance and be able to solving financial problems

 TO FINANCE INSTITUTES

Financial institutions needs to set up revolving fund aimed at incubating and help grow business
of women entrepreneurs in Addis Ababa so that they will be economically empower and be able
to contribute to the development of country and empowerment of themselves.
51
Setting up revolving fund eventually will be benefitting the financial institutions, as women’s by
nature are pragmatic savers. Hence, institutes should allow individual lending systems and
minimize the interest rates that they charge to women entrepreneurs to strengthen their
entrepreneurial spirit.

 TO EDUCATIONAL INSTITUTIONS

Educational and Training intuitions are supplying trained work force to the market. As such they
need to go extra mile to freely (social corporate responsibility) train personnel recruited by
women entrepreneurs as well as provide tailor made training for entrepreneurs in metropolitan
until the companies become self-sufficient and start to invest in their staff for further study.

That is investing today for tomorrows training needs which intern is steadily growing revenue.
Hence, it sound to say that formal training in the areas of business entrepreneurship must be
further enhanced so that women as nurtures of the upcoming generation are economically and
socially empowered.

For the women entrepreneurs to be vibrant and serve as a springboard for the mushrooming and
growth of a strong private sector in Ethiopia, educational institutions need to be informed that
supplying of disciplined and quality workforce can be considered as one of the necessary
conditions for women entrepreneurs to flourish.

A country with not well-developed human capital will face huge challenge and find it in
disadvantaged position to attracting Foreign Direct Investment (FDI).

 TO SECTORIAL ASSOCIATIONS

Sectorial associations and related development partners need to focus on linkage and twining
women entrepreneurs so that they will be able to learn from international companies and get
business mentorship, which is very crucial to ensuring their competition and global business
practice.

 TO CONCERENED GOVERNMENT ORGANIZATIONS

Many concerns aired by women entrepreneurs in Addis Ababa in the areas of lack of access to
market for their products; premises (land) to run their business, information to exploit business

52
opportunities and adequate infrastructures and gender inequalities. Hence, imperative to say
concerned government institutions to work to provide mainstreamed service to women
entrepreneurs to resolve challenges mentioned herein.

From the aforementioned review, it is possible to deduce that woman entrepreneur in

metropolitan must be supported so that they will be able to accessing finance; access to
information to exploit business opportunities, premises (land) to run their business, management
and leadership trainings.

53
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APPENDIXES

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