Small enterprises play the role of mobilizing fragmented and small sized capitalrnof individuals in the community and channel such resources to the pool ojrninvestment in the locality which is likely lead to the creation of amplernemployment opportunities.rnThough promotion of small enterprise development is important, knowing thernenterprises role in local economic development, their characteristics, mainrnproblems and factors affecting their performance have got a paramountrnimportance. In the study, enterprises were categorized into two, good and badrnperformers, purposively based on their performances in their respective subsectors.rnBy providing inputs for the housing construction and by creatingrnemployment opportunities for less skilled individuals play their vital roles.rnForming associations with unrelated individuals and shortage of start up capitalrnwere the core problems during the start up stage. Being under the influence ojrnthe government, lack of production space, difficulty of obtaining supplies andrndelay in the delivery of goods are the top four problems at the operation stage.rnAccess to credit, technology and relationships among members are some of thernmajor factors affecting the performances of the enterprises.rnHaving only one market linkage with the housing agency, high moneyrnwithholding and not being allowed to diversify or expand their businesses werernthe major reasons for the death of most of the enterprises in the study area.rnThe agency wants to control the enterprises in every aspects of their activity andrndoes not let them to be independent and is the one to determine the fate of thernenterprises. Most of the individuals participating in the enterprises have theirrnown private job and this collides with the essence of establishing enterprises forrnthe youth and unemployed section of the society. In one side, the governmentrntried to support the enterprises by providing trainings, working area, loans, thernrequired machines and supplies. On the other side, do not let them to diversify,rnimprove or expand their operation. This act of the housing agency rememberedrnthe Amharic idiomatic expression of 'endayamahe tiraw endaybela gifaw'rnliterally means invite him to come but does not permit him to eat.