Factors Affecting The Growth of Women Enterpreneurship in Micro and Small Enterprises in Kahmandu
Factors Affecting The Growth of Women Enterpreneurship in Micro and Small Enterprises in Kahmandu
Factors Affecting The Growth of Women Enterpreneurship in Micro and Small Enterprises in Kahmandu
Submitted By
Reshma Thapa
TU Regd. No.:7-2-429-27-2014
Submitted to:
Faculty of Management
Tribhuwan University
Kirtipur,Kathmandu
November 2022
1
TABLE OF CONTENTS
1) Background Information....................................................................................3
3) Objectives.............................................................................................................4
4) Research Question................................................................................................5
5) Hypothesis ...........................................................................................................5
7) Literature Review.................................................................................................6
8) Research Gap.........................................................................................................9
9) Conceptual Framework.........................................................................................10
References......................................................................................................................14
2
1. Background of the Study
Entrepreneurship has become more of a way of life and an engine for economic transformation
among the disadvantaged women Micro and small-scale enterprises represent an important
means of earning income for the women in Kathmandu .They provide a means of livelihood,
employment and income to alleviate poverty conditions. The numbers of women in
entrepreneurial roles has increased significantly over the last three decades. Their overall share
of Micro and small-scale enterprise sector in Nepal grew over 60 percent and women being the
majority beneficiaries and implementers. Entrepreneurial women are comparatively backward in
comparison to in terms of enterprise growth, income and in general competitiveness. Women’s
development not only reduced poverty by increasing productivity, but also the liberation and
empowerment. It is noticeable that entrepreneurship development and empowerment are
complementing to each other .Women empowerment depends on taking part in various
development activities which involves of women in various entrepreneurial activities in social,
economic and cultural fields.
Several studies have revealed MSEs as one of the most important alternative sectors for
socioeconomic development in both developed and developing countries, and that they play
significant roles in the creations of employment opportunities, reduction of poverty and
income generation for urban dwellers. In other words, as the Central Statistical Authority of
Nepal’s Report on Small Scale Manufacturing Industries Survey indicates, the importance
of the sector can help transform the economy from agrarian-based to manufacturing-led,
increasing agricultural productivity, reducing urban unemployment, and stimulating trade and
construction.
Several studies have revealed MSEs as one of the most important alternative sectors for
socioeconomic development in both developed and developing countries, and that they play
significant roles in the creations of employment opportunities, reduction of poverty and
income generation for urban areas. In other words, as the Central Statistical Authority of Nepal
Report on Small Scale Manufacturing Industries Survey indicates, the importance of the
sector can help transform the economy from agrarian-based to manufacturing-led,
increasing agricultural productivity, reducing urban unemployment, and stimulating trade and
construction. Micro and small enterprises has been rapidly improving than before, where it is
less likely to come across female entrepreneurs .they are participating in such areas where
3
they need limited capital such as service delivery, and much less in manufacturing.
female entrepreneurs in Kathmandu receive insufficient meaningful financial support and
training to manage their businesses efficiently. Historically, women in Kathmandu were
politically, economically, socially, culturally and religiously abused and mistreated. Due to
which women face difficulty in accessing finance while establishing a new business or
want to expand their business. Gender inequality has been the major problem in Nepal. As most
women in Nepal are working as the unpaid labor force in the family and more than 76% of
women are involved in agriculture, there is no recognition of their contribution to the economic
advantages that the family gets in return. In Nepal only 19% of women have ownership of the
fixed assets, whereas 25% of women are head of households. In terms of women in the economy,
a significant proportion of Nepalese women (40 percent) are economically active.
2. Statement of problem
As per a report by the Central Bureau of Statistics (CBS), 29.8 percent of the enterprises in
Nepal are owned by women, which are 247, 880 in number.
Women are dominated by men in society so women especially those living in rural communities
and the urban still face major challenges than that of men. The enterprises run by the women are
comparatively smaller, less likely to grow, less profitable and less capital investment than that of
men. Although the absolute number of women in self-employment has increased in recent years,
there still exist significant differences in the levels of new firm creation across genders and the
number of women involved in starting business is significantly and systematically lower than
that of men .A number of initiatives have been taken by the government, donors and non-
Governmental organizations both local and international to increase the start-up rates and
performance of women owned MSEs in Kathmandu valley Nevertheless, women in the sector
are still found predominately in low-growth rates, earning lower revenues than their male counter
parts .For many women, their involvement in business activities has yet to bring them to a point
of economic sustainability and advance them in a manner that is beneficial to them and to the
economy in general. Despite the efforts to empower women entrepreneurs there still exists a gap
between the supply side of opportunities and the demand side, where most women entrepreneurs
appear not to have taken full advantage of them.
4
3. Objectives
The objective of the study is to know about the factors affecting the growth of women
entrepreneurship in micro and small enterprises in Kathmandu valley.
For the fulfillment of the right direction the focus of studies is discussed as under:
i. To investigate how accessibility to market, finance, education and training affects the
growth of women entrepreneurship.
ii. To identify possible strategies to facilitate the development of MSEs and the
management of challenges faced by MSEs seeking to develop into medium
scale enterprises.
iii. To identify challenges that women-operated MSEs face in their development to
medium scale enterprises.
iv. To identify the socio-cultural factors affecting the women entrepreneurship.
4. Research Questions
The study was guided by the following research questions;
i. To what extent does the credit and finance affect the growth of women entrepreneurship?
ii. To what extent does the level of education affect the growth of women entrepreneurship?
iii. How does the accessibility to markets affect the growth of women entrepreneurship?
1. To identify challenges
that female-operated MSEs
face in their development
to
5
2. medium scale enterprises.
3. To identify challenges
that female-operated MSEs
face in their development
to
4. medium scale enterprises.
5. To identify challenges
that female-operated MSEs
face in their development
to
6. medium scale enterprises
7. To identify possible
strategies to facilitate the
development of MSEs and
the
6
8. management of
challenges faced by MSEs
seeking to develop into
medium scale
9. enterprises.
10. Based on the
7
12. to medium scale
enterprises in the area where
the study is conducted
13. To identify challenges
that female-operated MSEs
face in their development
to
14. medium scale enterprises To
identify challenges that female-operated MSEs face in their development to
medium scale enterprises.
5. Hypothesis
Samaiti (2006) and Tan (2000) in a study conducted in Gulele Sub-City, Addis Ababa,
Ethiopia that classified the challenges that businessmen/ entrepreneurs face socially and
economically. The economic factors include market competition, access to market, scarcity of
capital, absence/inadequate knowledge about market, problem in quantity/ quality of
production, poor infrastructure, lack of power supply and so on. While the social factors include
lack of public trust, and unfair treatment or bias. The findings of the study reveal that there is
positive relationship between accessibility of market and growth of women entrepreneurship in
SMEs. This study concluded that finance related problem, lack of managerial and entrepreneurial
skills, marketing problem and challenges faced by women entrepreneur has been mentioned as
one of the challenges in growth of women entrepreneurship in SMEs. However, this study
indicated that women entrepreneurship have a positive effect on the SMEs in Ethiopia Gulele sub
city.
8
Rwanda. The majority of the women entrepreneurship have positive contributions of small and
micro enterprises towards promoting their market accessibility, financial accessibility, number of
employments, accessibility towards education and training. Based on prior empirical studies,
9
market, scarcity of capital,
absence/inadequate knowledge
about market, problem in
quantity/ quality of production,
poor infrastructure, lack of
power supply and so on. While
the social factors include lack of
public trust, and unfair
treatment or bias.
H1: There is a significant relationship between access to market and growth of women
entrepreneurs;
H2: There is a significant relationship between educational and training and growth of women
entrepreneurs;
H3: There is a significant relationship between access to finance and growth of women
entrepreneurs;
H4: There is a significant relationship between socio-cultural factors and growth of women
entrepreneurs;
10
growth of women entrepreneurs in Kathmandu. The study will also make a positive contribution
to the economic recovery strategy for wealth and employment creation to the Nepal Government.
The study aimed at contributing to the understanding of factors affecting the women’s
performance in business and provides a set of practical suggestions aimed at positively
influencing women’s entrepreneurship development in Kathmandu. It will helps turn empower
the women both economically and socially and increase their power to taking decisions within as
well as outside the family.
7. Literature Review:
This chapter briefly outlines the various thought on what constitutes an entrepreneur as relevant
to promoting women emerging in this field Secondly, an analysis will be undertaken of the
socio-cultural factors, which facilitate or work against the making of a woman entrepreneur
examination of their access to various educational and training .
Entrepreneurship is an emerging concept in Nepal, the harsh economic realities of the 1990s
leading to declining economic growth rate against growing population rate has meant declining
gainful employment opportunities for hundreds of thousands of people.
The forests, trees, everything getting enveloped in the thick mist, the mighty Himalayas and
mountain peaks, seldom do we think about entrepreneurship. This place is so aggressively
agrarian that it is hard to box it in any other strata apart from agriculture. Entrepreneurship is
11
something Nepal is far from being known for, women entrepreneurship, in that case, could be a
greater challenge. There are so few women at the managerial level even in the developed
countries like Japan and U.K., it is therefore not very difficult to fathom what a massive
challenge women entrepreneurship would be in a country like Nepal.
Laxmi Sharma
She first female tempo driver and a single mother who fought all the odds of her life and
circumstances is one of the women who carved the way for women entrepreneurship in Nepal.
Her story is that of perseverance and persistence. Initially, work was a requirement to fill empty
stomachs of her family. Later, she founded Button Palace, a handicrafts institute. Today, she
inspires women to rise from the depths of suffering and become true victories in life.
Some of the barriers and constraints faced by women entrepreneurs includes: financial aspects,
gender roles, social inequality, entrenched cultural and traditional practices, technology, legal,
institutional and policy levels among others (IFC/world Bank 2006; Kibas 2006) .The specific
barriers or impediments for women entrepreneurship development are as follows:
According to Scott, (2001) the critical factors that facilitate rural women entrepreneurship
development can be classified as follows, first are regulative factors which refer to the different
rules of the government that facilitates women entrepreneurship development in rural areas. The
government and institutional policies and rules influence both economic and non-economic filed
for the entrepreneurs through its actions. The government can provide a facilitative socio-
economic setting for women entrepreneurs through minimizing the risks they encounter.. They
include both values and norms. Norms refers to the socially standard pattern of behavior. Rigid
social customs and strong religious constraints are creating difficulties for women entrepreneurs
in operating their business (Hossain and Rahman, 1999).
12
According to Luthans, (2005) education and access to information is very important cognitive
factor of women entrepreneurship development in rural areas educated entrepreneurs can
discharge the entrepreneurial responsibilities effectively.
Micro and small scale businesses are crucial in the socioeconomic development of any country.
They are a veritable vehicle for the achievement of national macroeconomic objective in terms of
employment generation for low level investment and the enhancement of apprenticeship training
(Osotimehin, Jegede, Akinlabi, & Olajide, 2012)
The importance of small and medium enterprises (SMEs) in the process of transition from a
centrally planned to a market economy is now widely recognized in the literature (Savych,
2002).
Nepal is a country well known for craftsmanship. From the earliest starting point up to the mid-
nineteenth century, the leaders of the nation advanced national businesses and exchange to
different proportions of creation, advancement, and support (Ghimire, 2012; Devkota et al.,
2020a).
8. Research Gap
The contribution of women entrepreneurship on SMEs has not received adequate research
attention in Kathmandu district. This means that, the study attempts to fill research gap by
examining the situation in Kathmandu and providing empirical evidence on factors affecting the
growth of women entrepreneurship in micro and small business within the country. While there
has been enough research available on the problems and challenges faced by Micro-Enterprises
and need of women entrepreneurship there is a dearth of literature and research on the Factors
Affecting the Growth of Women-Operated Micro and Small Enterprises (MSEs) in Ethiopia.
13
9. Conceptual framework
The conceptual framework will show a relationship that exists between variables that will be
used in the study.
Economic factors
Access to market
Socio-cultural factors
14
Access to market and growth women entrepreneurs
The ability to tap into new markets requires expertise knowledge and contacts. The women often
lack access to training and experience in how to participate in the market place and therefore
unable to market goods and services strategically. In addition, they are not often exposed to the
international market, and therefore lack knowledge about what is internationally acceptable.
H1: access to market has a significant and positive effect on women entrepreneurs’ growth;
The educational level of most women entrepreneurs is very low creating a barrier to them
accessing training and other Business Development Services (BDS). Women tend to be less
likely to have education and experience relevant to starting and managing a business and thus
less potential for success (Namusonge, 2006). 20 Gaining relevant skills and knowledge can also
be more difficult for women since they frequently have double work burden and childcare
responsibilities thus making them less able than men to attend formal and informal trainings.
H2: Access to Training, Skills and Education has a significant and positive impact on growth of
women entrepreneurs;
Access to finance is a key issue for women. Accessing credit particularly for starting an
enterprise is one of the major constraints faced by women entrepreneurs. Women often have
fewer opportunities than men to gain access to credit for various reasons including lack of
collateral, an unwillingness to accept household assets as collateral and negative perceptions of
female entrepreneurs by loan officers.
H3: access to finance has a significant and positive effect on growth of women entrepreneurs’;
Socio-cultural factors include a blend of social and cultural factors that affect women
entrepreneurs’ success. Social and cultural norms on the one hand and family issues, on the other
15
hand, are the most serious issues for women entrepreneurs. Even the social bonds and networks
with close relatives and life partner is a critical issue for women entrepreneurs’ success
postulated that social-cultural factors (religious, family, etc.) significantly affect women
entrepreneurs’ decision-making and success in developing economies. Based on the above-
mentioned literature, we propose this hypothesis;
H4. A Socio-cultural factor has a significant and positive effect on women entrepreneurs’
growth.
This chapter will explain the specifics of the design and research methodologies that will be
employed to accomplish the study's objectives and testing the hypothesis.
Research plan and design is the process to identify the relationship between the dependent and
independent variables to meet the objectives. Quantitative research design will be adopted in this
study. Quantitative study data is collected from a large and representative group of respondents.
The aim of this type of research is to quantify the data and to draw generalizing conclusions from
the sample to the whole population. Furthermore, survey method will be adopted for the purpose
of this study.
The data for this study were gathered through the use of primary data sources. The primary data
source for this study involved the use of questionnaire. The questionnaires will be distributed to
16
women entrepreneur in SME operators and owners for firsthand information for processing
towards answering the research questions.
The population of interest consisted of all the women entrepreneurs in different fields such as
Hairdressing; dressmaking, restaurants and hotels, retail shops, wholesale outlets produce stores
The scope of the study focused on micro and small enterprises owned and operated by WEs
engaged in various entrepreneurial activities in all the sub30 sectors i.e. trade service and
manufacturing. The sampling technique will be used in this research is probability sampling
method. Among the various probability sampling techniques, random sampling technique was
used for the study purpose.
SPSS and Excel will be used analysis for the data. Collected data from primary and secondary
sources will be edited, classified and compiled .Then the data will be presented in appropriate
forms of table, charts and figures. The data will be analyzed statistical tools. Different kinds of
parametric and non-parametric statistical tools will be applied for the test of hypothesis.
Descriptive statistics such as percentage, frequency, mean, and standard deviation will be
computed to provide a snap view of the data collected from the respondents, and the hypotheses
will be tested by using the correlation, regression analysis, and chi square test.
Y=A+B1X1+B2X2+B3X3+B4X4
Where
Y= Growth of entrepreneurship
A=Constant Team
X4=Socio-Cultural factors
17
References
Acharya M. (1990) Priority Sector Credit Programme and Womens Access to Credit.
CWD Networker Nepal.
Almus,M. Nerlinger, E .A (1999), Growth of New Technology Based Firms; Which
Factors Matter1} Small Business Econ 13 (2): 141-154.
Bartik TJ (1989), Small Business Start-ups in the United States; Estimates of the Effects
of Characteristics of States. South Econ J.55. 1004-1018.
Jyoti tuladhar (1996) factors affecting women entrepreneurship in small and cottage
insustries in nepal
Rizwan Ullah Khan, Yashar Salamzhel, syed Zulfiquar Alishah (2021) Factors affecting
women entrepreneurs’ success: a study of small- and medium-sized enterprises in
emerging market of Pakistan 1(4), 12–23
Abd Rani, S. H., & Hashim, N. (2017). Factors that influence women entrepreneurial
success in Malaysia: A conceptual framework. International Journal of Research in
Business Studies and Management, 1(4), 16–23.
Ezilda Cabrera, David Mauricio (2017) Factors affecting the success of women’s
entrepreneurship: a review of literature 9(1):31-65
WINFRED KAJUJU MURIMI (2010) factors affecting the growth of women
entrepreneurship in kiringiya east district, central province kenya . L50/72598/2008.
Fesseha. Mulu Gebremariam (2017) Factors Affecting the Growth of Women-Operated
Micro and Small Enterprises (MSEs) in Ethiopia ISSN: 2147-351X | e-ISSN: 2564-8039
18
Rabindra Ghimire June (2012) Micro and Small Level Enterprises in Nepal
Dipak Bhahadur Adhikari, Niranjan Devkota, Dipendra Karki , Bimal Shakya (2021)
Financial Hurdles in Small Business Enterprises in Kathmandu Valley 12(06):1105-11
Tycconstory (2020) Growth and Development of women entrepreneurs
Rizwan Ullah Khan, Yashar Salamzibeh Syed Zuliquar Ali Shah and Mazhar
Hussain(2021)
Factors affecting women entrepreneurs’ success: a study of small- and medium-sized
enterprises in emerging market of Pakistan Article number: 11
19
It is obvious that Micro and
Small Enterprises (MSEs) are
pivotal in the world
socioeconomic development.
Many highly-industrialized
countries like Japan, China,
and
20
Taiwan have based their
industrial development on
MSEs in which they are now
a role
model for less-developed
countries on how to utilize their
domestic resources,
unemployed
labor and domestic
technologies (Chemeda, 2003;
Rudjito, 2003). Self-
employment and/or
entrepreneurship are important
to socioeconomic development,
for increasing productivity,
21
innovation and for creating
employment opportunities
mainly for the youth. In
addition,
entrepreneurship reduces
poverty and income inequality
between rich and poor in any
given
country. MSEs are one of the
means by which people
become self-employed or
entrepreneurs. Entrepreneurs
are often pragmatic, innovative,
have vision and ideas, are risk
22
takers, able to exploit
opportunities and capable of
transforming their ideas into
economic
opportunities (Girma, 2015).
Several studies have revealed
MSEs as one of the most
important alternative sectors for
socioeconomic development in
both developed and developing
countries, and that they play
significant roles in the
creations of employment
opportunities, reduction of
poverty and
23
income generation for urban
dwellers. In other words, as the
Central Statistical Authority of
Ethiopia’s (2015) Report on
Small Scale Manufacturing
Industries Survey indicates,
the
importance of the sector can
help transform the economy
from agrarian-based to
manufacturing-led, increasing
agricultural productivity,
reducing urban unemployment,
and
24
stimulating trade and
construction.
This sector generates about 48%
of the aggregate employment in
North Africa, 51% in
Latin America, 65% in Asia,
72% in Sub-Saharan Africa,
6.2% in the United States,
22.3% in
China, 80% in India, 67% in
Japan, and 70% in European
countries. In Ethiopia, about
half of
the urban labor force is
engaged in this sector and
25
Addis Ababa alone accounts
for nearly
40% of the total MSE operators
(Endalsasa, 2012 as cited by
Menda, 2015; ILO, 2002 as
cited
by Menda, 2015).
Despite this, in Ethiopia there
are many more MSEs than
ever before, where it is less
likely to come across female
entrepreneurs or, if any, most
often they are participating in
26
areas where they need limited
capital such as service
delivery, and much less so in
manufacturing. Bekele and
Worku (2008, p. 4 as cited in
Clack, 2014) refer to surveys
conducted by the World Bank
(2005), World Trade
Organization (2002), and the
Ministry of
Finance and Economic
Development of Ethiopia
(2002) that concluded female
entrepreneurs
27
in Ethiopia receive
insufficient meaningful
financial support and training
to manage their
businesses efficiently.
It is obvious that Micro and
Small Enterprises (MSEs) are
pivotal in the world
socioeconomic development.
Many highly-industrialized
countries like Japan, China,
and
Taiwan have based their
industrial development on
28
MSEs in which they are now
a role
model for less-developed
countries on how to utilize their
domestic resources,
unemployed
labor and domestic
technologies (Chemeda, 2003;
Rudjito, 2003). Self-
employment and/or
entrepreneurship are important
to socioeconomic development,
for increasing productivity,
innovation and for creating
employment opportunities
29
mainly for the youth. In
addition,
entrepreneurship reduces
poverty and income inequality
between rich and poor in any
given
country. MSEs are one of the
means by which people
become self-employed or
entrepreneurs. Entrepreneurs
are often pragmatic, innovative,
have vision and ideas, are risk
takers, able to exploit
opportunities and capable of
30
transforming their ideas into
economic
opportunities (Girma, 2015).
Several studies have revealed
MSEs as one of the most
important alternative sectors for
socioeconomic development in
both developed and developing
countries, and that they play
significant roles in the
creations of employment
opportunities, reduction of
poverty and
31
income generation for urban
dwellers. In other words, as the
Central Statistical Authority of
Ethiopia’s (2015) Report on
Small Scale Manufacturing
Industries Survey indicates,
the
importance of the sector can
help transform the economy
from agrarian-based to
manufacturing-led, increasing
agricultural productivity,
reducing urban unemployment,
and
32
stimulating trade and
construction.
This sector generates about 48%
of the aggregate employment in
North Africa, 51% in
Latin America, 65% in Asia,
72% in Sub-Saharan Africa,
6.2% in the United States,
22.3% in
China, 80% in India, 67% in
Japan, and 70% in European
countries. In Ethiopia, about
half of
the urban labor force is
engaged in this sector and
33
Addis Ababa alone accounts
for nearly
40% of the total MSE operators
(Endalsasa, 2012 as cited by
Menda, 2015; ILO, 2002 as
cited
by Menda, 2015).
Despite this, in Ethiopia there
are many more MSEs than
ever before, where it is less
likely to come across female
entrepreneurs or, if any, most
often they are participating in
34
areas where they need limited
capital such as service
delivery, and much less so in
manufacturing. Bekele and
Worku (2008, p. 4 as cited in
Clack, 2014) refer to surveys
conducted by the World Bank
(2005), World Trade
Organization (2002), and the
Ministry of
Finance and Economic
Development of Ethiopia
(2002) that concluded female
entrepreneurs
35
in Ethiopia receive
insufficient meaningful
financial support and training
to manage their
businesses efficiently.
It is obvious that Micro and
Small Enterprises (MSEs) are
pivotal in the world
socioeconomic development.
Many highly-industrialized
countries like Japan, China,
and
Taiwan have based their
industrial development on
36
MSEs in which they are now
a role
model for less-developed
countries on how to utilize their
domestic resources,
unemployed
labor and domestic
technologies (Chemeda, 2003;
Rudjito, 2003). Self-
employment and/or
entrepreneurship are important
to socioeconomic development,
for increasing productivity,
innovation and for creating
employment opportunities
37
mainly for the youth. In
addition,
entrepreneurship reduces
poverty and income inequality
between rich and poor in any
given
country. MSEs are one of the
means by which people
become self-employed or
entrepreneurs. Entrepreneurs
are often pragmatic, innovative,
have vision and ideas, are risk
takers, able to exploit
opportunities and capable of
38
transforming their ideas into
economic
opportunities (Girma, 2015).
Several studies have revealed
MSEs as one of the most
important alternative sectors for
socioeconomic development in
both developed and developing
countries, and that they play
significant roles in the
creations of employment
opportunities, reduction of
poverty and
39
income generation for urban
dwellers. In other words, as the
Central Statistical Authority of
Ethiopia’s (2015) Report on
Small Scale Manufacturing
Industries Survey indicates,
the
importance of the sector can
help transform the economy
from agrarian-based to
manufacturing-led, increasing
agricultural productivity,
reducing urban unemployment,
and
40
stimulating trade and
construction.
This sector generates about 48%
of the aggregate employment in
North Africa, 51% in
Latin America, 65% in Asia,
72% in Sub-Saharan Africa,
6.2% in the United States,
22.3% in
China, 80% in India, 67% in
Japan, and 70% in European
countries. In Ethiopia, about
half of
the urban labor force is
engaged in this sector and
41
Addis Ababa alone accounts
for nearly
40% of the total MSE operators
(Endalsasa, 2012 as cited by
Menda, 2015; ILO, 2002 as
cited
by Menda, 2015).
Despite this, in Ethiopia there
are many more MSEs than
ever before, where it is less
likely to come across female
entrepreneurs or, if any, most
often they are participating in
42
areas where they need limited
capital such as service
delivery, and much less so in
manufacturing. Bekele and
Worku (2008, p. 4 as cited in
Clack, 2014) refer to surveys
conducted by the World Bank
(2005), World Trade
Organization (2002), and the
Ministry of
Finance and Economic
Development of Ethiopia
(2002) that concluded female
entrepreneurs
43
in Ethiopia receive
insufficient meaningful
financial support and training
to manage their
businesses efficiently.
It is obvious that Micro and
Small Enterprises (MSEs) are
pivotal in the world
socioeconomic development.
Many highly-industrialized
countries like Japan, China,
and
Taiwan have based their
industrial development on
44
MSEs in which they are now
a role
model for less-developed
countries on how to utilize their
domestic resources,
unemployed
labor and domestic
technologies (Chemeda, 2003;
Rudjito, 2003). Self-
employment and/or
entrepreneurship are important
to socioeconomic development,
for increasing productivity,
innovation and for creating
employment opportunities
45
mainly for the youth. In
addition,
entrepreneurship reduces
poverty and income inequality
between rich and poor in any
given
country. MSEs are one of the
means by which people
become self-employed or
entrepreneurs. Entrepreneurs
are often pragmatic, innovative,
have vision and ideas, are risk
takers, able to exploit
opportunities and capable of
46
transforming their ideas into
economic
opportunities (Girma, 2015).
Several studies have revealed
MSEs as one of the most
important alternative sectors for
socioeconomic development in
both developed and developing
countries, and that they play
significant roles in the
creations of employment
opportunities, reduction of
poverty and
47
income generation for urban
dwellers. In other words, as the
Central Statistical Authority of
Ethiopia’s (2015) Report on
Small Scale Manufacturing
Industries Survey indicates,
the
importance of the sector can
help transform the economy
from agrarian-based to
manufacturing-led, increasing
agricultural productivity,
reducing urban unemployment,
and
48
stimulating trade and
construction.
This sector generates about 48%
of the aggregate employment in
North Africa, 51% in
Latin America, 65% in Asia,
72% in Sub-Saharan Africa,
6.2% in the United States,
22.3% in
China, 80% in India, 67% in
Japan, and 70% in European
countries. In Ethiopia, about
half of
the urban labor force is
engaged in this sector and
49
Addis Ababa alone accounts
for nearly
40% of the total MSE operators
(Endalsasa, 2012 as cited by
Menda, 2015; ILO, 2002 as
cited
by Menda, 2015).
Despite this, in Ethiopia there
are many more MSEs than
ever before, where it is less
likely to come across female
entrepreneurs or, if any, most
often they are participating in
50
areas where they need limited
capital such as service
delivery, and much less so in
manufacturing. Bekele and
Worku (2008, p. 4 as cited in
Clack, 2014) refer to surveys
conducted by the World Bank
(2005), World Trade
Organization (2002), and the
Ministry of
Finance and Economic
Development of Ethiopia
(2002) that concluded female
entrepreneurs
51
in Ethiopia receive
insufficient meaningful
financial support and training
to manage their
businesses efficiently
It is obvious that Micro and
Small Enterprises (MSEs) are
pivotal in the world
socioeconomic development.
Many highly-industrialized
countries like Japan, China,
and
Taiwan have based their
industrial development on
52
MSEs in which they are now
a role
model for less-developed
countries on how to utilize their
domestic resources,
unemployed
labor and domestic
technologies (Chemeda, 2003;
Rudjito, 2003). Self-
employment and/or
entrepreneurship are important
to socioeconomic development,
for increasing productivity,
innovation and for creating
employment opportunities
53
mainly for the youth. In
addition,
entrepreneurship reduces
poverty and income inequality
between rich and poor in any
given
country. MSEs are one of the
means by which people
become self-employed or
entrepreneurs. Entrepreneurs
are often pragmatic, innovative,
have vision and ideas, are risk
takers, able to exploit
opportunities and capable of
54
transforming their ideas into
economic
opportunities (Girma, 2015).
Several studies have revealed
MSEs as one of the most
important alternative sectors for
socioeconomic development in
both developed and developing
countries, and that they play
significant roles in the
creations of employment
opportunities, reduction of
poverty and
55
income generation for urban
dwellers. In other words, as the
Central Statistical Authority of
Ethiopia’s (2015) Report on
Small Scale Manufacturing
Industries Survey indicates,
the
importance of the sector can
help transform the economy
from agrarian-based to
manufacturing-led, increasing
agricultural productivity,
reducing urban unemployment,
and
56
stimulating trade and
construction.
This sector generates about 48%
of the aggregate employment in
North Africa, 51% in
Latin America, 65% in Asia,
72% in Sub-Saharan Africa,
6.2% in the United States,
22.3% in
China, 80% in India, 67% in
Japan, and 70% in European
countries. In Ethiopia, about
half of
the urban labor force is
engaged in this sector and
57
Addis Ababa alone accounts
for nearly
40% of the total MSE operators
(Endalsasa, 2012 as cited by
Menda, 2015; ILO, 2002 as
cited
by Menda, 2015).
Despite this, in Ethiopia there
are many more MSEs than
ever before, where it is less
likely to come across female
entrepreneurs or, if any, most
often they are participating in
58
areas where they need limited
capital such as service
delivery, and much less so in
manufacturing. Bekele and
Worku (2008, p. 4 as cited in
Clack, 2014) refer to surveys
conducted by the World Bank
(2005), World Trade
Organization (2002), and the
Ministry of
Finance and Economic
Development of Ethiopia
(2002) that concluded female
entrepreneurs
59
in Ethiopia receive
insufficient meaningful
financial support and training
to manage their
businesses efficiently
60