The Challenges Of Micro And Small Enterprises And Business Development Service

The objective of this research was to investigate empirically the challenges that the Micro andrnSmall Enterprises in Bahir Dar city are facing and the extent of business development servicesrnprovided by the Technical, Vocational and Enterprise Development Department of the cityrnAdministration’sTechnical, Vocational, and Enterprise Development Department to help themrncontinue in operation. This research covered both the demand and the supply side of businessrndevelopment service. The sample involved in the study were 334 micro and small enterprisernoperators and an expert from each of the nine sub cities of Bahir Dar. The number of micro andrnsmall business operators from every sub city, and the five selected business sectors werernproportionately selected using a multi stage stratified clustering method. The results of the studyrnrevealed that,the micro and small enterprisesoperating in the city have been facing variousrnconstraints that needs additional effort from different actors. The effort that has been deployedrnby the TVEDD as a BDS provider appeared to be very low. Micro and small enterprises found itrnvery difficult to access alternative financing, market for their products, adequate trainings andrnadvisory services, infrastructure, quality inputs and skilled labor to improve productivity andrnmaintain the required standards of quality. This in turn affected their products’ marketabilityrnand negatively contributed towards their negotiation capacity to grow and continue in operation.rnIn general, the BDSs thatTVEDD provided to date are found very helpful by the enterprisesrnoperating in manufacturing, construction and urban agriculture sectors. On the other handrnbusiness from retail and service sector found the services to be generic and not in line with theirrnidentified gaps. Even though the information on BDS is available to the MSEs at large,TVEDDrnprovided services were not equally accessible by the MSEs.In relation to the level of challengernthat the MSE operators are facing, the level of non-financial services provided to the MSEs isrnvery limited. The awareness level of MSEs to make use of BDS is also at its infant stage.Thernresults found suggest that, BDS is important to improve growth and sustainability of MSE but thernquality and quantity of the services provided to the MSE need to be enhanced, well-coordinatedrnand networked. It is also equally important to document and institute a referral system tornenhance both the quality and the quantity of the services that need to be provided to MSEs.rnFinally the government should also consider encouraging and building the capacity of the nongovernmentalrnservice providers and facilitators to satisfy the needs of the MSEs to grow andrnsustain.rnKey words, Business Development Services, Micro and Small Enterprises, Bahir Dar

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