The Mediating Role of the Capital Growth of Wood-based Micro and Small Enterprises on Livelihoods in North Western Amhara, Ethiopia

Abstract

A study was conducted to evaluate the impact of wood-based micro and small enterprises on livelihood improvements among entrepreneurs in the northwestern Amhara region. Data were collected from 225 wood-based micro and small enterprises through questionnaires, focus group discussions, and key informant interviews. Analysis methods included frequency tables, chi-square tests, and structural equation modeling (SEM). The findings indicated that 78.7% of enterprises were experiencing growth, while 21.3% were declining. Structural equation model analysis identified significant factors influencing business growth in the first stage, including the type of working place, access to credit, and market linkage. In the second stage, a positive and significant relationship was observed between business growth and various livelihood outcomes such as food security, health, education, and decision-making abilities. These results underscore the importance of continued support from the government and other relevant stakeholders to maximize the positive impact of wood-based enterprises on people’s lives. Moreover, a comprehensive policy framework that acknowledges and leverages the diverse contributions of wood-based micro and small enterprises can facilitate sustainable and holistic improvements in the livelihoods of entrepreneurs and their communities.