The Roles and Challenges of Micro and Small Enterprises in Urban Employment Creation in Ethiopia

Abstract

This study had the objective of assessing the roles and challenges of micro and small enterprises (MSEs) in urban employment creation in Debre Berhan Town, Amhara Regional State of Ethiopia. Mixed research approach was adopted and both primary and secondary data was collected. The study had a total of 352 respondents who were selected using systematic sampling technique. Tools of data collection were questionnaire, interviews, and focus group discussions (FGDs). The findings of the study revealed that MSEs have indeed contributed significantly in creating urban employment, and in generating income of employees. However, the capacity of creating employment and generating income varies among MSE. While the construction and manufacturing sectors had better employment creation and income generation capacity, trade sector was the least in creating such opportunities. The challenges of MSEs in employment creation include lack of adequate finances, inputs, poor organizational structure and management, poor government support and regulations, and technological challenges.