Journal of Business and Administrative Studies

Abstract

Micro and Small Enterprises (MSEs) are driving forces for economic growth, job creation
and poverty reduction in developing countries. Cognizant of this fact, Ethiopia is one of the
countries which have taken measures to enhance the operation of MSEs. However, there
are MSE’s in the country that have shown deteriorating performance and have been
experiencing huge stumbling blocks with no significant graduation from one enterprise
level to the next. This study was conducted in some selected districts of Akaki-Kality Subcity
with the purpose of analyzing the challenges confronting MSEs' successful operation.
To this end, a mixed research design was applied that involved quantitative (descriptive
survey) and qualitative (exploratory research) methods. For this study, 89 questionnaires
were distributed and 81 of them were successfully completed and used for analysis. The
participants were selected using a combination of purposive, stratified and simple random
sampling methods. In addition, in-depth interviews were conducted with 12 sub-city and
district officials and experts; and 9 MSE’s owners through semi-structured interview
questions. The quantitative data were analyzed using appropriate descriptive and
inferential statistics while the qualitative data were analyzed by using content analysis and
narration approach. As a result, the study revealed that the MSEs in the study area had
created considerable employment opportunities for unemployed youth and contributed their
part in boosting the incomes of households as well as personal savings. On the other hand,
MSEs have been confronted with a number of challenges that obstructed their successes. In
particular, the study had pinpointed inadequate infrastructure facilities, inadequate
finance, poor managerial and technical skills, and inadequate working premises as the
major challenges of MSE’s successful operations followed by marketing problems, low
support from respective institutions, inadequate supply of raw materials, and regulatory
issues. In line with the findings obtained from this study recommendations to respective
governmental bodies and MSE’s owners/managers have been forwarded.