Performance Of Micro And Small Enterprises And Their Role In Enhancing Local Economic Development A Case Study In Gullele Sub City Of Addis Ababa

Local economies often get developed with the participation of government, non-governmentrnorganizations, and the community at large. Among the community, micro and smallrnenterprises operators have the capability to strengthen the local economy through mobilizingrnlocal resources. This research explores the performance of Micro and Small enterprises andrntheir role in enhancing local economic development in Gullele Sub-City, Addis Ababa. Thernanalysis was based on primary and secondary data collected through administrative type ofrnquestionnaires and key informant interviews from the operators, government officials, andrnenterprise representatives. Contribution of MSEs is viewed in terms of the enterprises’rnperformance by using their capital, profit, and employment creation. To see their impact, thernstudy also review contribution of MSEs in light of economic improvement of the operatorsrnthrough household income and saving habit, household’s expenditure to food, education,rnhealth, durable and non-durable assets. Finally, discussion was held with operatorsrnregarding the challenge and opportunities the enterprises and operators are facing now. Thernresults indicate that, MSEs show improvement in their capital and profit. The enterprises’rnperformance in terms of employment, capital and profit varies based on the sector in thernstudy area. Construction and wood and metal works need high initial capital, they are laborrnintensive and have higher profit margin than the textile and the food and beverage subrnsectors. Hence, this shows their contribution to local economic development is encouraging.rnMost of the operators are performing without appropriate training even if training isrnprovided by the government. Nonetheless, the operator’s living standard, income, foodrnconsumption, education, health, durable, and non-durable household assets are increasing.rnMost of the operators have a plan to expand the business either in the same line or to have arnbranch and diversify the business which has a greater impact to the local economicrndevelopment. However, there is still much untapped potential for improvements in thisrnrespect beyond what has been achieved so far. Major constraining factors for realizing suchrnpotential include lack of technical and entrepreneurial skills, lack of sufficient capital,rnaffordable access to raw material and input and lack of market to their product

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