Abstract

Poverty alleviation efforts involve enabling measures that increase the capacity of active

poor to engage in gainful activities, so as to improve their livelihood. Thus, provision of

MSEs to the poor has been viewed as one of the tool to accelerate the rapid economic

development. And, hence, MSEs create a spillover effect that is by creating job

opportunity, generate income that helps to improve the educational status of the family,

thereby alleviate urban poverty. Thus supporting MSEs in Ethiopia is one of those main

ways to reduce urban poverty and bring sustainable economic development. Accordingly,

this study has attempted to identify problems and prospects of Micro and Small

Enterprise sectors of Jimma Town Administration. The study was conducted mainly by

collecting primary data through semi structured questionnaire (interview) from 100 MSEs

operators of which all have responded. To this end the researcher has used descriptive

method to analyze data collected, and some statistical ways of data presentation and

analysis like tabulation, mean and percentage have used. However, the researcher faced

some limitations in different time and different stages of study like in adequacy of time

and others. Regardless of these, the researcher has reached into certain conclusions.

Accordingly, although their impact and their distribution in the town is very low, MSEs

play a vital role in socio-economic development of Jimma Town residents as a means of

generating sustainable employment and income and helps by being a spring board for

medium and large scale enterprises, and in the process by contributing to the reduction of

poverty. The survey of the sample respondents has showed that, operators of MSEs face a

serious problems of start up and working capital, working and selling places, market, skill

and experience were found to be major constraints.

Finally the concerned Jimma Town Administration offices and other stakeholders which

might play a significant role in development of MSEs have been suggested as a

recommendation to improve the productivity and fruitfulness of available operational

MSE sectors in line with attracting some other parts of society.

In this regard it is strongly recommended to solve market related problems such as

provision of business development services (BDS) and solving finance related constraints

like facilitating easy access to loan, avoid some unnecessary rule and procedures which

have played a significant role in hindering the development of MSE in the town.

i

TABLE OF CONTENTSTitles Page Abbreviations...............................................................................................................................iDefinition of Terms......................................................................................................................ii

CHAPTER ONE1 Introduction...............................................................................................................................1 1.1 Background ........................................................................................................................1 1.2 Statement of the Problem ...................................................................................................1 1.3 Objectives of the Study ......................................................................................................3 1.3.1 The General Objectives of Study .................................................................................3 1.3.2 The Specific Objectives of Study ................................................................................3 1.4 Significance of the Study ...................................................................................................4 1.5 Scope of the Study..............................................................................................................4 1.6 Organization of the Paper ..................................................................................................4CHAPTER TWO2. Related Literature Review.......................................................................................................5 2.1 Definitions and Concepts of Poverty..................................................................................5 2.2 Definitions and Concepts of MSEs.....................................................................................5 2.3 Size and Diversity of the Sector .........................................................................................7 2.4 Poverty and the Informal Sector ........................................................................................7 2.4.1 Characteristics of Informal Sector and Their Economic Condition .............................7 2.4.2 General Characteristics and Roles of MSEs.................................................................8 2.4.3 Areas of Activities .......................................................................................................10 2.5 The Problems and Constraints of MSEs Sector: In LDCs..................................................11 2.5.1 Constraints to Facing the Sector in Ethiopia.................................................................12 2.6 Policy Framework in Ethiopia............................................................................................13 2.6.1 Micro and Small Scale Enterprises Development Strategy in Ethiopia.......................14 2.6.2 Poverty Reduction Strategy of FDRE Government......................................................14 2.6.3 Micro and Small-scale Enterprises in the Fight against Poverty..................................15 2.7 Role and Contribution of the Sector ..................................................................................16CHAPTER THREE3. Research Methodology ...........................................................................................................18 3.1 Research Type ....................................................................................................................18 3.2 Sampling Frame, Sampling Technique and Sample of the Population .............................18 3.3 Data Source ........................................................................................................................18 3.4 Methods of Data Analysis ..................................................................................................18 3.5 Data Gathering Tools..........................................................................................................19 Bibliography Appendices Questionnaires

ii

List of Tables

Page No.

Table 4.1.1:

Table 4.1.2 Sample MSEs respondents by family size..........................................................

Table 4.1.3 Sample MSE operator’s respondents by number of dependents .......................

Table 4.1.4 Distribution of MSEs owners by level of education at time of before

and after starting business ..................................................................................

Table 4.1.5 Amount of Starting Capital of the Respondents.................................................

Table 4.1.6 Source of Finance for starting up Capital ..........................................................

Table 4.1.7 Sample Household Respondents by types of Occupations before

starting up this business ....................................................................................

Table 4.1.8 Reasons for Getting into Specific Business .....................................................

Table 4.2.1.1 Summary of Important Objective of the Business .........................................

Table 4.2.1.2 Market Related Obstacle of MSEs Growth and Expansion ..........................

Table 4.2.1.3 Rules/Regulations Related Obstacles to MSEs Growth and

Expansion .....................................................................................................

Table 4.2.1.4 Changes Observed in MSEs Sector After the Reform (1997).........................

Table 4.2.1.5 Summary of Respondents on Improvements of the

Overall Policy Environment of the Reform (Overall).....................................

Table 4.2.1.6 Summary of Respondents on Improvements in the licensing

procedure.........................................................................................................

Table 4.2.1.7 The Perceived Degree of Predictability of Changes in Laws,

Rules and Policies of the Government ............................................................

iii

Abbreviations

BDS Business development services

CSA Central Statistics Agency

DBE Development Bank of Ethiopia

EDP Entrepreneur Development Program

ETP Ethiopian Birr

FDRE Federal Democracy Republic of Ethiopia

FeMSEDA Federal Micro and Small Enterprises Development Agency

GDP Gross Domestic Products

ILO International Labor Organization

IT Information Technology

LDCs Least Developed Countries

MFI Micro Finance Institution

MoFED Ministry of Finance and Economics Development

MOTI Ministry of Trade and Industry

MSEs Micro and Small Enterprises

MWUD Ministry of Works and Urban Development

NGOs Non-Governmental Organizations

NUPI National Urban Planning Institutes

PASDEP Plan for Accelerate Sustainable Development and to End Poverty

PRSP Poverty Reduction Strategic Paper

UNDP United Nation Development Program

WB World Bank

iv

Definition of key terms and concepts

Micro and Small Enterprises: are those enterprises that employ less than ten persons most of

them are found in the informal economy

Micro Enterprises: are those small businesses with a paid up capital of not exceeding birr

20,000 and excluding high technical consultancy firms and other high technical establishment.

Small Enterprises: are those business enterprises with a paid up capital of above 20,000 and not

exceeding burr 500,000 and excluding high technical consultancy firms and other high technical

establishments

Urban poverty there is no consensus on a definition of urban poverty but two broad

complementary approaches.

Conventional economic definitions use income, consumption life expectancy, infant mortality,

literacy, school enrolment rates, access to health, or drinking water, to classify poor groups

against common index of material welfare.

Where as, anthropologists and social planners working with rural communities in the third

world use perceptions of non-material deprivation and social differentiation to define poverty

(Wratten 1995; Satterthwaite 1995a).

v

vi

CHAPTER ONE

1.1 Introduction

To day, the greatest problem facing Ethiopia is poverty. From the total population which is

estimated to be over 75 million (http://www.csa.gov.et/), 50 percent lives below the global

average income of one dollar per day. According to figures in the human development index of

UNDP (1999), about 46 percent of the national population is categorized below the poverty line.

The prevalence of poverty in rural and urban areas is 47 percent and 33 percent, respectively.

Further more, the average life expectancy is 43 years (Euro development countries Sep, 2006).

To tackle this serious problem, successful small businesses are the primary engines of economic

development, income growth and poverty reduction in much of developing world

(http://www.ilo.org/pub.cgi/link ).These businesses can also build foundation for stable

communities, civil society and gender equality, though poor infrastructure, weak public services,

and lack of access to markets information and formal financing remain major impediments to

small business growth in Ethiopia.

The sector plays a quite a significant role in the socio-economic life or the majority of

population and it continuous to be a crucial sector in light of the increasing unemployment rate in

the country. MSEs require two of major types of services; financial services and non financial

services, more commonly referred as business development services (BDS). Financial services

help existing or expanding a business such as finance for equipments and materials, production

premises and working capital. On the other hand BDS refers to the provision of information,

knowledge and skills as well as advice on the various aspects of a business.

The importance of the contributions of Micro and Small Enterprises sectors (MSES) into

development goals is being recognized in many different countries. Therefore, closer attention is

being paid to the factors that promote the growth and development of the sector, including

identification of the important role of the policy, legal and regulatory environment. Of these,

much attention is given to the policy and legal framework within which MSEs operate and the

regulatory and administrative systems to which they must comply. It has become recognized that

MSE promotion is to ensure that the growth of small business is adequately supported by legal

and regulatory environment often the Micro and Small Enterprises sectors faces, arrangement of

1

legal and regulatory constraints and biases that can limit the capacity of the sector to create new

employment.

Opportunities to foster technological innovation and produce wealth, furthermore, even when the

legal and regulatory instrument themselves are supportive of small business operations, their

enforcement and implementation may be inadequate or insufficient, as well as inequitable and

not transparent, promotion of Micro and Small Enterprises sectors has become an integral part of

the national economic development process.

The design and setting up of available and comprehensive micro and small enterprise promotion

measures would be important in Ethiopia, to facilitate its socio-economic development. Based on

this fact the FDRE government, in its industrial development strategy adopted, and has

underlined the need for promoting Micro and Small Enterprises sectors (Industrial development

strategy of FDRE 2003 Amharic version).

1.2 Statement of the Problem

Jimma Town is one of the oldest and a commercial centre of Ethiopian Towns, having a

population of about 120,600(http://citypopulation.net/Ethiopia.html)and is found in the South

West of Addis Ababa with the distance of about 340 Kms. One of the vital problems of Jimma

town administration is unemployment. To tackle this problem the program undertaken by town

administration in collaborations with Oromia Regional Government, is mainly focused on micro

and small enterprises support so as to generate employment and to bring economic growth.

Micro and small enterprises are one of the focal development agenda for the town administration

due to this fact the promoting of the sector is under taken with three main departments of micro

and small enterprises development; market research and promotion department, cooperative

promotion and controlling department.

Jimma town administration coordinates the operational activities of the sector at the kebele

level in order to mitigate the problem of poverty and employment. The town is organizing those

people having different skills in to private business and cooperatives by creating jobs

opportunities and providing different supports and services. The focus areas of Jimma town

administration MSEs are textile and garment, wood and metal works, food processing

2

2

construction and municipal activities and other sectors (i.e. retailers of goods). The activities

performed by the town are provision of work place, establishing of Kiosks and retailer,

organizing who are voluntary in to cooperatives, creating conducive environment for operators

involved in the sector to sub contracting them to medium and large scale enterprises, conducting

research which is useful to the target groups, and provision of one-stop-shop services for the

sector. Having these facts in the study area, the sample survey is conducted in those Micro and

Small Enterprises sectors operators who are engaged in the cooperative in 1996 EC and after

wards. However this research tries to investigate the drawbacks and the appreciable area that

need to be assessed, therefore, to maximize reliability of information and to maximum

effectively of the survey the informants of the survey are the target group with closed

questionnaire.

The role of MSEs in the process of economic and social development of the country is

enormously vast, however in most developing countries, Micro and Small

Enterprises sectors face a wider range of constraints and problems and they are unable to address

the problems they face on their own, those major problem which are of policy, structural and

institutional in nature are lack of business developments services, in adequacy of enhancing the

capacity of the sector and public private partnership. Hence, this study will attempt to answer the

following research questions.

1. What is the potential/prospects/ of Micro and Small Enterprises in contribution to

economic development.

2. What are the problems that hinder the development of Micro and Small

Enterprises?

3. How could it be possible to enhance the capabilities of the Micro and Small

Enterprise sectors to represent its need for development?

1.3 Objectives of the Study

1.3.1 The General Objectives of Study

To examine and identify the challenges and prospects of Micro and Small Enterprise sectors in

the economic development.

3

1.3.2 The Specific Objectives of Study

o To assess the impact of environmental policy, legal and other regulatory policies on the

development of micro and small enterprises

o To identify the most critical problems that affects the expansions of the micro and small

enterprises in the Jimma Town Administration.

o To assess the significance of micro enterprises in generating employment opportunities

and income generation to economic development in the study area and,

o Based on the findings, to come up with possible recommendations as solutions for main

problems related to the sector.

1.4 Significance of the Study

The study enables leaders, policy makers and researchers to understand the role of MSEs in

economic development and to create awareness on the business community and to identify the

enterprises problems and work together with policy makers and other agents and stake holders so

as to create conductive environment to alleviate poverty, employment and economic

dependency. The study also examines the prospects and problems of micro and small enterprise

sectors expansion which enables to take corrective action to augment the role of MSE in

economic development of the country. In addition to this, the study tries to explore the policy

and regulatory challenge of MSEs, the thus helping policy makers to evaluate their plans or

achievements against the drawback of such achievements and to recommend corrective

economic development measures.

1.5 Scope of the Study

The study focuses mainly on the current private sector development trends of micro and small

enterprise sectors with reference to examining their challenges and prospects of in economic

growth of Ethiopia. The study is conducted in particular reference of micro and small enterprise

sector operators in Jimma town Administration from the year 1996 E.C.

1.6 Organization of the Paper

This research will consist five chapters of which:

The first chapter deals with an introduction and contains background of the study, statement of

the problem objectives and significance of the study, scope of the study

4

The second chapter deals with theoretical framework of micro and small enterprise issues in the

organization views of different authors about the subject under study be stated and critically

investigated with reference of different literatures.

The third chapter deals with research methodologies, in Fourth chapter, empirical evidences

gathered through questionnaires will be organized and presented; furthermore, it deals with

analysis, interpretation and discussion of the data summary and findings. Finally the Fifth

chapter shall present conclusions and some suggested recommendations.

5

CHAPTER TWO

2. Related Literature Review

2.1 Definitions and Concepts of Poverty

The common way of defining poverty is that those people who are unable to secure above the

poverty line. The basic assumption behind poverty line is originated from the fact that survival of

human beings below a certain level of standard consumption is impossible. This may be relative

or absolute in magnitude (poverty situation in Ethiopia, 1997).

Absolute poverty is meant to represent a specific minimum level of subsistence income

necessary to secure the basic needs of food, clothing and shelter in order to continued survival.

This is the situation where most LDCs are characterized; absolute poverty line is based on the

cost of minimum consumption basket based on the food necessary to recommend calorie intake.

The poverty line is the augmented by an allowance for non-food need consistent with the

spending patterns of the poor (WB, 1993).

Relative poverty refers to the position of individual or household compared with the average

income in the country such as poverty line set as one half of the minimum income, or the 40 th

percentile of the distribution relative poverty line with vary of with the level of average income.

Absolute poverty refers to the position of the individual or household in relation to the poverty

line whose real value is fixed overtime.

2.2 Definitions and Concepts of MSEs

Defining MSEs has continued to be controversial issue with no general consensus on the part of

the various sectors of society Andeson (1982) classifies manufacturing activities (including

micro enterprises) in three phases pre dominate house hold manufacturing, replacing workshops

and factories, and finally large scale production some studies defines macro enterprises, as a firm

employing no more than 5-10 workers, including the owner and family. They engage in non-

corporate income generation and less then USD 10.000 equivalent if total capitals starting often

less then USD 100 (WPTSP; 1993:1) on the other hand, micro enterprises is considered as an

enterprise employing or less people involved in business with informal characteristics and with

lower limit of are person business, (Axe. et. al. 1993:7) here it is good if we identify the informal

characteristic.

6

The informal sector is characterized by easy entry, heavy reliance on indigenous resources,

family ownership, soundless on its operation, labor intensive in nature, technological adoption

and unregulated and competitive behaviors. Furthermore, the Development Bank of Ethiopia

(DBE) defines the small scale enterprises as those whose total investment cost (including

working capital) is below Ethiopian birr (ETB) 3 million, the average being ETB 600,000

700,000 (cited in Axectial, 1993:15). Strassman (1987) alternatively considered small enterprises

whose major engagement is petty commodity production within productive set of family

business that over exploit themselves and transfer the surplus to the capitalist sector because of

cheaper wage goods allow lower wages, (stassman, 1987:122) furthermore, a study from the

republic of South Africa have defined micro enterprises as small business, often involving only

the owner, some family member (s) and at the most one or two paid employees. They usually

lack formality in terms of business licenses, value added tax (VAT), registration, formal business

premises, operating remits and accounting procedures (DIT, 1995:9) considering the difficulties

associated with the definition, according to Bennett and Goldberg (WPTP, 1993) the terms

enterprise is disaggregated in to four distinct stages. First, those subsistence enterprises consist of

seasonal part time diversified economic activities and are typically operated by low income

persons in risk adverse households. Second, those new micro enterprises are based on single

economic activity, which is a multi seasonal and receives routine investment; third, those growth

indented enterprises adjust production techniques to permit expansion into new product lives and

new markets, and lastly, those mature micro enterprises and small enterprises. One can clearly

understand that there is no standard definition that will fit for every country. Moreover, it is very

difficult to draw a clear cut between what is a micro enterprise and what is a small business.

Recently international financial organization and aid agencies like world bank and UNSAID

begun to define small and micro enterprises other as businesses that have less than 10 employees.

Medium enterprises as that with 11-100 employees and carry out their activities in an organized

and formal way. As it is stated in (Jenkins, 1996), recently small and micro enterprises are

referred as “enterprises that have fewer than employees”.

6

7

2.3 Size and Diversity of the Sector

As Zewdie and associat4es, 2002, explains, the sample survey conducted in 48 major towns by

the CSA (1997 E.C). There are 584, 913 and 2,731 informal sector activity operators and small

scale manufacturing industries respectively that absorb 739,898 labor forces. The survey

revealed that a micro enterprise on an average engages one person, and the average annual

operating surplus is about birr 1300. In addition to this, as it was described on the website of

FeMSEA, currently there are about 348,673 entrepreneurs involved in MSEs in Oromia Region

which are accounted about 39.1% of the country.

Regarding the diversity of the informal sector activity (MSE), the survey indicated that a large

number of informal sector operators are concentrated in limited area of activities i.e. 47% in

manufacturing, 42% in trade, Hotel and restaurant, activities about 6% in community and

personal services and the rest 5% are involved in agriculture, hunting, forestry and fishing,

mining and quarrying, construction and transport activities.

On the other hand, the survey on small scale manufacturing industries showed that small

manufacturing industries are mainly engaged in the manufacturing food, fabricated metals

furniture and wearing apparels. These job sectors constitute more than 85% of the surveyed

small scales manufacturing industries.

The MSE is characterized by highly diversified activities which can create job opportunities for a

substantial segment of the population. This indicated that the sector is a quick remedy for

unemployment problem. To curb unemployment and facilitate the environment for new job

seekers and self employment a direct intervention and support of the government is crucial.

2.4 Poverty and the Informal Sector

According to Bekele T. (1996), the informal sector could broadly be defined on the basis of the

characteristics and business activities of firms. Thus, the informal sector consists of which the

majorities are without having license for their business operation.

8

2.4.1 Characteristics of Informal Sector and Their Economic Condition

The informal sector is constituted of business operations outside government regulations. They

are not officially recognized and registered by the government and do not operate under various

regulation such as income tax regulations. The majority of enterprises in the informal sector

neither has sufficient capital nor have undergone any training most of the entrepreneur are with

low income and incapable of covering their basic requirements.

2.4.2 General Characteristics and Roles of MSEs

Micro and small enterprises development in Ethiopia

The important role of micro and small enterprises play in the process of economic development

has now been widely acknowledged. The nation is mainly attributed to the failure of

development endeavours pursued during much of the 20th century. Economic development

particularly industrial development was pursued along the path of large scale enterprise which

was often promoted by governmental and transitional companies. But all the efforts were not

able to generate the expected economic impact and sustainable development

(FEMSEDA 2004 p, 43).

About 60% of Ethiopian GDP is dominated by agriculture. The industrial sector is at its infant

stage contributing near to 10 percent of GDP, while the population of Ethiopia has been growing

at an average rate of 3 % per annum. The agricultural sector has been growing at a rate of 1.6%

implying deterioration in the living standard of the agricultural population (Behanu and

Befekadu, 2001).

The productive capacity of the county has remained low due to both natural and human induced

factors. This was compounded by in appropriate policy measure of the 1970 and 1980s. Which

were characterized by massive state control of the productive sector was deliberately

marginalized with the collapse of derg regime in 1991; the centralized economic policy was

replaced by market led economic system. In this kind of economic structure, micro and small

enterprises (MSEs) have a considerable role to play (FEMSED, 2004).

The promotion of MSEs becomes an integral part of the national economic development process.

The design and setting up of viable and comprehensive MSE promotion measures would be

important if Ethiopia is to facilitate its socio economic development. cognizant of this fact the

government of the federal democratic Republic of Ethiopia has underlined the need for

9

promoting MSEs in its industrial development strategy adopted recently (industrial development

strategy of FDRE, 2003-Amharic version).in order to realize the objectives of developing micro

and small enterprises (FEMSED, 2004 pp31).

The MSEs sector is a highly diversified sector and plays a predominant role in the economies of

the most developing countries. It comprises manufacturing enterprises, workshops, traders and

other service facilities providers. It ranges from relatively modern to simple and traditional, from

independent enterprises to ancillaries and contractors, and from units mainly catering to the

domestic market to exporters. Moreover, MSEs are characterized by family based, low capital,

limited entrepreneurial skill, self sustaining labor intensive and highly productive compared to

large enterprises either in a capital to a labor ratio or in high value added to fixed assets ratio

(FeMSEDA, 2000:25). Based on MSEDA (2000:25-26), some other similar characteristics of the

sector are normatively summarized as flows:

Most of the final products of the MSE cater to basic needs, such as food, clothing and

housing facilities of the majority of the population;

MSEs use less imported materially and equipment;

MSEs are often the source of new products and innovations;

As industrial restructuring takes place in industrial countries developing countries

become natural ground for sourcing and MSEs can play a significant role in meeting such

demand;

MSEs could continue to exist by rapid response to market signals, efficient and flexible

utilization of locally available resources and by attracting customers through cheap and

convenient services;

MSEs make an important contribution to total manufacturing output;

Women’s involvement in the MSE sector greater than other sector and hence women can

be encouraged to be empowered;

A great proportion of MSE sector employment is in the form of self employed

proprietorship and family based;

Their activities are concerned with satisfying the basic consumer needs of ordinary

peoples;

10

MSEs are more volatile than medium and large firms, i.e. more birth and more growth,

more creation new jobs and wealth;

MSEs contribute more than proportionally to innovation and technological transfer,

provide more opportunities for few ideas and skills to be tested;

The sector is increasingly globalize and able to compete internationally on an equal

footing with larger firms;

In terms of economic recession and able are form program, MSEs tend to react faster

using their flexibility advantage to new opportunities as a result of which they private

employment to the unemployed.

In general, MSEs, are a key component in economic life, not only because of their number and

variety but also because of their involvement in every aspect of the economy, their contribution

to regional development, the complementary role they plan in support of the large sector and

their role as providing grounding for innovation and adaptation (FeMSEDA, 2000:26). More

precisely, role of MSEs are:

Encourage and stimulate indigenous entrepreneurship,

The seedbed for growth and development,

Save scarce capital resource and employees scarce labor force,

Create self employed entrepreneurs,

Mobilize capital and develop in capital market,

Use simple technology and local resource,

Contribute to a more equitable income distribution and wealth.

However, the economic impact of MSEs can be measured by their contribution to out put,

employment, income investment, exports and other economic indicators. And, therefore, MSEs

are a vital part of all economic development (FeMSEDA, 2000:26).

2.4.3 Areas of Activities

Informal sector activities are productive and income generating enabling the people involving to

feed their families. Generally the role of women is significant, Studies have indicated that

worldwide, 1/3 of all businesses in the informal sector are operated by women, though,

11

participation rates vary from country to country (Half and Healena, (1991) as cited by Bekele T.

(1996)).

According to Bekele T.(1996), in Ethiopia most of the informal micro enterprises are small scale

and operated by one man or assisted by family members. They involve highly labor intensive,

traditional technology requiring relatively little capital. The business activities of the informal

sector could be categorized and in to four major areas of operation.

A. Agricultural sector informal enterprises: these are small farm operations or off-farm

activities performed in the urban areas. This may include, rearing of milk cows, fattening

(ox, sheep, and goat), poultry raising, bee keeping, marketing of crops and small holder

horticultural crop production, etc.

B. Manufacturing, handicraft and cottage industry: several surreys have been conducted

on such enterprises during the last years; a survey conducted by ILO in Addis Ababa,

Harar, and Diredawa revealed that the activities performed in this sector are wearing

spinning, embroidery, shoe making, local drink, making knit wear production, potter

tanning, arts and crafts, wood and metal works, basket works injera making, bread

baking, food processing, etc (ILO, 1990 as cited by Bekele T. 1996).

C. Service sector informal enterprises: this include shoe repair, shoe shinning, electrical

equipment repair watch and clock repair, auto mechanic tyre mending, tapestry,

photography, hair dressing, tailoring, entertainment, garage, brick laying etc.

D. Informal enterprises in petty trade: this category includes grain and spices trade,

selling of food beverages frit and vegetables, second hand clothes, lottery tickets news

paper and magazines as well as operating garment ships and small restaurants

2.5 The Problems and Constraints of MSEs Sector: In LDCs

According to FeMSEDA (2000:26-28), the following problems are incurred in MSEs are in a

very real sense an extension of the personality of their owners and any attempt to generalize

about them or their problems are difficult as any generation about large number of human beings.

MSEs Owner’s perceptions of their inability to analyze their situation and their views of what

might or should be provided for them by others.

12

The major constraints identified by various studies include the entrepreneurship capacity, capital,

technology, marketing liability of market infrastructure, raw material problem, in availability of

market information and advice, lack of clear regulation and laws, demand problem (marketing),

weak support institutional arrangements. The absence of research on business opportunities,

environmental effects, lack of effective market linkages, lack of skilled human resource.

However, these constraints are from time to time sought to be addressed by policy and

institutional interventions in all the countries but not always to great deal of avail. The problems

may be either supply side or a combination of both.

2.5.1 Constraints to Facing the Sector in Ethiopia

In most developing countries, small businesses are a wider range of problems and they are

unable to address the problems they face on, their own, even ineffectively functioning market

economics. The constraints relate among others, to the legal and regulatory environments, access

to markets, finance, business information of skills and managerial expertise, access to

appropriate technology, access to quality business infrastructure, and in some cases

discriminating regulatory practices.

In Ethiopia’s situation, since there have not been any organized policy and support systems that

cater for the sector, MSEs have been confronted by various problems, which are of policy,

structural and institutional in nature. To start with lack of smooth supply of raw materials and

lack of working premises were the major bottlenecks for small scale manufacturing industries to

commence their activities. On the other hand, lack of sufficient capital and working premises,

were start (Worku and Daniel, 2004).

Serious marketing problems, shortage of supply of raw materials, lack of working capital are the

first and most pressing problems for which hindered MSEs not to expand their business whereas,

lack of capital market and working premises are affecting informal sector operators not to

expand their businesses.

For instance, the result of the survey on urban informal sector activities showed that out of the

584,913 informal sectors activity operators, above 50% replied that their first major difficulty

when starting their operation was lack of sufficient initial capital. Similarly, out of 2,731 small

13

scale manufacturing industries covered by the survey, about 36% have replied that their first

problem when starting their operation was lack of sufficient initial capital.

Although the economic policy of the country attention for entrepreneurship values and

appreciation of the sector’s contribution, to the economy, there are still constraints related to

infrastructure, credit working premises, extension service, information provision, imbalance

preferential treatment and many others which therefore need proper attention (Zewdie and

Associates, 2002).

2.6 Policy Framework in Ethiopia

2.6.1 Micro and Small Scale Enterprises Development Strategy in Ethiopia

In November 1997, the FDRE through MOTI has developed strategy for the development and

promotion of MSEs. The primary objective of the strategy is to create enabling environment for

MSEs. Given such an enabling environment, it is expected that hundreds and thousands of MSEs

will be responsible for the operation, growth and progress of their enterprises. In addition to

these basic objectives the national MSEs strategy have the following specific objectives

(MWUD, 2007:27).

Facilitate economic growth of bringing about equitable development,

Create long tern jobs,

Strengthen cooperation between MSEs,

Provide the basis for medium and large scale enterprises,

Promote export,

Balance preferential treatment between managements and bigger enterprises.

The strategy have also lined with the various supports that should be provided for MSEs in order

to assist them to overcome viable business, which can successfully compete in the market.

The element of the support programmers include measures with regard to creating an enabling

legal framework and streamlining regulatory conditions that hinder the coming up of new and

expansion of existing MSEs. In addition, the specific support programmer also include measures

related to facilitating access to finance, provision of incentives, promotion of partnerships,

training, access to market, access to information and advice, infrastructure and institutional

strengthening of the private sector associations and chambers. Moreover, the strategies have

14

covered a wide range of organization with responsibility to provide assistance to MSEs. Therese

concludes all levels of government organs, NGOs, associations, private institutions and foreign

donor agencies. The commitment of these institutions and the degree of the support system is

directed to the successful implementation of the strategy.

The strategy further made of clear that the major organs to be involved in the implementations of

the strategy are: MOTI, Regional Bureau, Federal MSE, development agency, or designed

organs NGOs and business organization (MWUD, 2007)

2.6.2 Poverty Reduction Strategy of FDRE Government

The poverty reduction strategy of Ethiopia also show the government commitment to continue to

institute, promote and strengthen micro and small scale enterprise development. The strategy

poling out that the following strategic actions will be taken to alleviate the increasingly growing

problem of unemployment, provide vocational and skill training programs that enable to promote

self-employment and job creation;

Promote micro finance institution in urban areas (centers)

Facilitate access to working capital by promoting the establishment of community

managed saving, and credit comparatives, micro fiches institutions and community

support mechanisms such as ‘Idir’ and ‘Iqub’

Promote community based rehabilitation and programmes for disadvantaged groups

(elderly handicapped, etc).

Creating and implementing an enabling legal framework

Streamlining regulatory conditions

Facilitating access to:

Incentive schemes

Encouraging partnerships-training in entrepreneurship skills and management

Access to appropriate technology

Access to market

Access to information and advice etc.

As MSE sectors are highly diversified and characterized by an enormous number of problems of

varied degree and complexity, it is not possible to address the whole range of MSEs, operating in

1415

different sectors at the same time. The strategy therefore provides the following general

yardsticks for prioritizing target beneficiaries which might be adopted in every region depending

on specific conditions and potentials of regions:

MSEs which are based on local raw materials and/or labor intensive (local resource

based)

MSEs which have greater inter and inter sectoral images (particularly those having higher

linkages with agriculture)

MSEs which are engaged in important substitution and with a potential for export

MSEs, engaged in activities that facilitate and promote tourism, etc.

2.6.3 Micro and Small-scale Enterprises in the Fight against Poverty

Ethiopia is a country where agriculture is the main employer of human labor, absorbing nearly

85% of the total population. Owing to this fact, the FDRE government put in place and engages

in implementing appropriate development policies and strategies with the main focus on

accelerating sustainable development and eradicating poverty. The various development policies

and strategies that focused on agricultural development in particular are registering rapid

beneficial from it.

The FDRE government has yet exerted a policy which focuses on the expansion of MSEs as a

major source of employment for citizens out of agriculture and fall under on unemployed. While

the ongoing expansion of urban economy and the growing demand of the urban community for

goods and service are creating substantial opportunities for the development of MSEs, the special

attention given to them by the government in particular is expediting boom in the sub sector

(Yared, F. 2004).

The MSEs which have been given special attention by government for poverty alleviation are

believed to become seedbeds for the development of medium and large enterprises in the

country. They have also been considered as a major employer of underemployed labor in

agriculture, and as a means to diversify the sources of income for farming families. Moreover,

with the aim of reducing urban unemployment, down to less than 20%, the government is

supporting MSEs and accelerating the creation of urban based employment.

Among the various supports by the government in favor of MSEs development are developing

vocational and technical training programs, provision of shelter and basic services a community

16

based and labor intensive urban work program; as well as expanding micro finance institutions

that focus on the need of urban poor. There are also other supports provided by government

which include providing market support, promotion, etc.

Areas of high potential for MSEs development identified by the government include animal

raring, poultry, silk harvesting honey production, small scale garment manufacturing, metal work

construction, and increasing urban based services (eg. solid waste collection, parking lots, small

shops and repair services etc.).

According to recent document by MoFED, about half of the value output of the manufacturing

sector is believed to be contributed by MSEs. Their contribution in the service sub sector (Petty

trade) is also significant.

The other contribution made by MSEs in regard to economic growth and development is

employment creation. So far hundreds of thousands of people have been employed in the various

sub-sectors of MSEs. The bulk of tehse were engaged in the construction sub sector. Another

point worth mentioning is that previously, the MSEs were concentrated in Addis Ababa.

However, they are now well expanding to regional towns in the country. As a result MSEs are

now playing a substantial role in reducing unemployment as well as contributing towards the

national economy to the nation

The MSEs development activities in Ethiopia were officially launched in 1989 E.C when the

Federal Agency responsible for their expansion and development was established. Ever since,

several MSEs agencies with similar tasks and responsibilities have been established at regional

level taking each own objective reality into consideration (MOTI, 1997).

2.7 Role and Contribution of the Sector

According to Zewdie and associates, (2002) in successful developing countries, MSEs by virtue

of their size location capital investment and their capacity to generate greater employment have

provide their powerful propellant effect for rapid economic growth.

17

The sector is also known as an instrument in bringing about economic transition by effectively

using the skill and talent of the people without requesting high level training, much capital and

sophisticated technology.

The MSEs, is also described as the national home of entrepreneurship. It provides the ideal

environment enabling entrepreneurs to exercise their talents to the full and to attain their goals.

In all the successful economies, MSEs are seen as an essential spring board for growth job

creation and social progress at large.

The small business sector is also seen as an important force to generate employment and more

equitable income distribution, to activate competition, exploit niche markets, and enhance

productivity and technical change. Though the lion share of large industries and other enterprises

is undenied in contributing to Ethiopian Economic development, there is ample evidence that the

labor absorptive capacity of the small business sector is high.

The average capital cost per job created is usually lower then in big business and its role in

technical and other innovation activities is vital for many of the challenges facing our country.

According to the result of the sample survey mentioned above, the whole labor force engaged in

the informal sector activities and small manufacturing industries is more than eight fold (739,

898 individuals) to that of medium and large scale manufacturing industries (9,213 persons)

survey of manufacturing and electricity industries (1994/95).

Moreover, the informal and small manufacturing sector contributes value added for small

manufacturing sector contributed value added for birr 8.3 million in 1996. Based on the 1992/93

(statistical abstract 1995) data, this figure constituted abut 3.4% of the GDP, 33% of the

industrial sectors contributions and 2% of the manufacturing sector’s contribution to the GDP of

the same year.

18

CHAPTER THREE

3. Research Methodology

3.1 Research Type

As it is mainly mentioned in objectives of the study parts the aim of this study are, among other

things, to portray individuals view towards micro and small enterprises, to assess the challenges

and prospects of MSEs in the study area. Hence, the data needed for the above issues are

quantitative kind. Therefore, the type of research for this specific study is descriptive research

study.

3.2 Sampling Frame, Sampling Technique and Sample of the Population

The sampling frame for this study is 768 MSEs members in order to get reliable and dependable

information, the total population (sampling frame) MSEs member. Thus simple random

sampling technique is appropriate to these MSE operators.

Specifically the study will be conducted by gathering data from MSEs operators. The following

table depicts the sample size of which the data will be gathered from. This sample size will

represents 13.02% of the total sampling frame.

No Category Total population Sample size Percentage

1 MSCs operators 768 100 13.02

Table 3.1 the sample size of the study

3.3 Data Source

The study will be mainly focuses on primary data. But in some cases, secondary data may be

used.

3.4 Methods of Data Analysis

Data will be organized first based on the basic research questions and then analyze using

descriptive statistics method, following analysis, data are interpreted in relation to the general

facts and theories. Furthermore categorical methods such as carts, briefly, tabular presentation

will be used to study.

3.5 Data Gathering Tools

Questionnaire technique will be used in order to collect data and closed ended questions will be

utilized. The survey technique is used to allow an examination of selected. MSEs and

19

generalization of the result to a large population from selected smaller groups. The

questionnaires are expected to include personal data, educational back ground, about the

business, premises, problems encountered, during starting the business, numbers of workers and

its composition, opportunity of delegation, support and training objectives of the business,

degree of market related rules and regulations obstacles, promising changes in policy and

implementation after reform, the perceived degree of predictability of changes in laws and

policies, the expected government adherence to and implementation of policies, degree of

business sector participation and suggestion and comments of MSEs operators. In line with this,

secondary data collection will be used in order to incorporate review of materials which were

presented in workshop, conferences and publication of CSA findings concerning MSEs and it

also reviewed the economic materials on private sector held in Ethiopia by local authorities and

Ministries.

Moreover, outsourcing internet materials are also will be used so as to see prospects and

challenges of MSEs in the economic development of Ethiopia at large as well as to find out

conclusion and recommendations.

20

CHAPTER FOUR

DATA ANALYSIS AND FINDINGS

Under this chapter, the results of the survey are discussed to identify problems of MSEs

members encountered to start, expand and develop their activities. In addition to this, the

impact of policy, rules and regulating is assessed to see impacts on the challenges and

prospects in MSEs for economic growth. As it was mentioned in the third chapter,

primary data are gathered from a sample of 100 MSE operators, which are found in

Jimma Town Administration using open and close ended (semi-structured)

questionnaires.

4.1 An Overview of the Background of the MSEs Operators

According to the sample survey in this study, in terms of gender, male operators

dominate (83%) over female operators (17%),the result does not change even when we

split the sample into micro and small categories based on the definition of government of

Ethiopia. Federal MSEs, i.e. male operators dominate in accounting for 83%. These

contrasts with the situation in other countries for example in lied Hold and Mead (1999),

which is based on survey data from 12 countries, it is reported that, “the majority of

MSES in most countries are owned and operated by women”.

These were surveys undertaken as part of the USAID funded GEMINI project in

Botswana, Kenya, Malawi, Switzerland, Zimbabwe, Democratic Republic of Guinea,

Jamaica, Lesotho, Niger, Nigeria and SA covering more than 65,000 MSEs.

The information gathered from Jimma Town Administration in every MSEs members

indicated that most of the MSEs operators are male. This trend contradicts the common

belief that MSEs are means of offering minority group (disadvantaged) and women the

way to enter the economic mainstream and encourage women self-employment.

21

Table 4.1.1:

Age group

Number of Respondents TotalMale Female

Frequency % Frequency % Frequency %14-25 13 13 4 4 17 17

26-35 45 45 9 9 54 54

36-45 25 25 3 3 28 28

46-55 - - 1 1 1 1

>55 - - - - - -

Total 83 83 17 17 100 100

Source: Field survey.

Table 4.1.2 Sample MSEs respondents by family size

Family size Number of respondentsFrequency %

Below 5 66 66

5-10 44 44

Above 10 - -

Total 100 100

Source: Field survey.

Regarding the family size of sample household, respondents as it can be observed from

table 4.1.2, 66% of the total respondents have 4 and less individuals. Whereas 44% of

them have a family size of 5 up to 10 persons (individuals).

Table 4.1.3 Sample MSE operator’s respondents by number of dependents

Number of respondents Number of respondentsFrequency %

Below 5 62 62

5-10 38 38

Above 10 - -

Total 100 100

Source: Field survey.

22

Regarding to the number of dependents, the field survey have indicated that 62% of the

total sample respondents have 4 and less individuals who earn from their activities,

similarly, about 38% of them feed about 5-10 family members from their duties

(Activities). From this empirical data, it can be observed that the possible dependent ratio

is considerably high.

The sample data revealed that most of the MSEs are owned/run by relatively adult

operators with the mean age of between 26-35 years. This implies that, the participation

of youth in the MSEs sector is low. Even though, the government and the concerned

bodies have designed. Various policies and strategies to promote especially the young

operators who will be job creators than seekers, the information from the sample data

revealed that the achievements are far from being satisfactory.

The sample data obtained from the respondents showed that most of the MSEs operators

have a relatively large household size of Ethiopia which is 4.8 (CSA, 1994 population

and housing census). Therefore, most of their family members do not have any job and

are dependent. This implies that expanding the business of MSEs operators is too much

difficult for the fact that their income is used for their household consumption rather than

for saving and reinvesting so as to expand their business.

When we consider their educational background, as it has shown on table 4.1.4, almost

all MSEs operators are literate i.e., 11(11%) are below grade 5, 32(32%) of them are

attended grade 5-8, 35(35%) of them are grade 9-10, about 16(16%) are grade 11-12 and

lastly 6(^%) of them holds a diploma and/or certificate. From this information, one can

conclude that, most of the MSEs operators have at least the basic skills of writing and

reading. On the other way, most of them have no technical or vocational training and are

simply running their jobs and it looks like they have developed their knowledge, through

accumulated experiences.

As it is observed from the survey data, there have not been significant changes of

educational level of MSEs operators before and after holding their business (Table 4.1.4).

23

Table 4.1.4 shows, at the time of business start, 22% had above high school and after

starting their business there has been no change on education level.

Table 4.1.4 Distribution of MSEs owners by level of education at time of before and

after starting business

Level of Education

Before starting After starting Number % Number %

Illiterate - - - -

Grade 1-4 11 11 11 11

Grade 5-8 32 32 25 25

Grade 9-10 35 35 42 42

Grade 11-12 16 16 13 13

Above grade 12 6 6 9 9

Total 100 100 100 100

Source: Sample survey (2010)

Regarding their education, though most of the sample MSEs operators were literate

before starting their business, they did not have improved their education significantly.

This is due to the fact that most operators help or owned family with the income they

gain from operating MSE and did not have sufficient finances to cover expenses other

than consumption. This has been resulted from some constraints for the sector, such as;

market access, constraints of capital, in accessibility of working places for market

activity.

The sample data have showed that, most of the enterprises were operating for about 4 and

more, and have started their business in 1998 and after wards. As it was observed from

the sample data respondents, their average starting capital is 1000.00 (one thousand) Birr,

and most of the operators are starting their respective with small amount of capital.

24

Table 4.1.5 Amount of Starting Capital of the Respondents

Amount of starting capital in Birr

Number of Respondents Frequency %

Below 1000 56 56

1001-10,000 40 40

10,001-20,000 2 2

Above 20,000 2 2

Total 100 100

Source: Sample survey

Further more, the sample data have revealed out that, most of operators of MSEs were

financed out of personal savings, borrowing from relatives/friends and support (loan)

from government/NGOs. Relative to other financial sources, than mentioned, their role in

financing MSEs, so was unsatisfactory. This is being due to high interest rate, short

payment periods and long procedural formalities for accessing loan. On other hand, some

other source of finance such as saving from other owned business, cash from ‘Iqub’, bank

and suppliers loans and inheritance are insignificant. The importance of ‘Iqub/Idir as a

source of finance for starting a business is not as high as usually believed an early studied

(Fasika and Daniel, 1997) had found the source of start up capital for MSEs to be; a)

personal saving, b) borrowing from friends and relatives, c) support from government,

d) saving from other owned business, but, under this research finance form financial

institution come to sixth source of finance, this is a promising but it needs more

improvements.

Table 4.1.6 Source of Finance for starting up Capital

Source of capital (finance) Number of Respondents Frequency %

Personal saving 38 38Saving from other owned business 8 8Borrowing from relative/friends 22 22Inheritance 1 1Support from government/NGOs 19 19Banks and suppliers loans 5 5Cash from ‘Iqub’ 7 7Total 100 100 Source: Sample survey

25

Table 4.1.7 Sample Household Respondents by types of Occupations before starting up

this business

Types of Jobs before starting MSEs operator

Number of Respondents Frequency %

No occupation 54 54

Retailers 22 22

Metal and wood works 8 8

Barberry and beauty salon 3 3

Sewing machine 5 5

Laborer - -

Army (soldier) 3 3

Civil servant - -

Others 5 5

Total 100 100

Source: Sample survey

Regarding the types of their occupation, before starting MSEs operators, 54% has no

occupation (or were unemployed) regardless of the type of employment i.e. privately or

public. However, of the total respondents, about 46 of them were employed were holding

an occupation).

The other issue, which was assessed by sample survey, was about their business

premises. As it has been already mentioned before (in the scope of study), the sample

survey is conducted on MSEs operators who have started their businesses in 1996 EC and

afterwards with different provision of support and services by government. Accordingly

all of the respondents have gained different support and services from the government,

though the support may be provision of training, infrastructures, kiosks, etc.

Table 4.1.8 shows the distribution of MSE operators based on the reasons for getting into

their specific business. One can easily understand from the table that 29(29%) of the

respondents, are to help their family, 28(28%) of them are for self employment, but 16

(16%) of them have replied that they have engaged in the sector due to the fact that they

26

lack other option for employment, and other 11(11%) have said that they had skill in the

area of their business. Furthermore, about 5(5%) of sample respondents have replied that

for better income, 4(4%), 4(4%) and 3(3%) have engaged in the sector for the fact that

the sector need small start up capital, having heritage from parents and viewing MSEs as

having high profit respectively.

Therefore, it can be simply concluded that, most of MSEs operators have entered to their

respective sector (activity) that for helping their family, self-employment, and some

others due to lack of any option to be engaged into other activity.

From this empirical data it can also be observed that, most MSEs operators lack

entrepreneurial quality for the success of business that is initiative (self initiative).

Initiative implies doing things before being asked or/and forced by events (like provided

currently by government) or even any other external forces..

Moreover, it is observed from the data that, the number of male operators is much less

than female operators who have cited no other better alternative as their reasons, they

also consider MSEs sector as the last chances to which they resort to having exhausted all

other possibilities, this implies also that, a significant number of MSEs operators are

being misunderstood the significant role of MSEs in terms of job creation, source of

income and powerful instrument in economic growth.

Generally, the information from the sample data have showed that the major reasons for

entering into specific sector is in order to help their families, self employment and lack of

other option for their employment.

Table 4.1.8 Reasons for Getting into Specific Business

27

Reasons Number of Respondents Frequency Percentage

It need small start up capital 4 4

- No need higher education 5 5

- Would be profitable 3 3

Heritage from parent 4 4

Have no better alternative 16 16

For self employment 28 28

To help family 29 29

Have skilled in the area of business 11 11

Total 100 100

Source: Sample survey.

The information gathered from Jimma Town Administration in all MSEs operators have

showed that they have organized in a cooperative form to solve problems of finance and

skill constraints. But, the sample survey have showed that these operators has a great

problem of low access to finance, uncertain market, lack of basic knowledge about

business. As a result, among these operators of the sector some of them are not successful

and even a significant number of them are on the way to lease their activity during the

time of collecting data. Though, all have organized in group cooperatives to have a

chance job opportunity, income and working place, most of them do not prepares reliable

business plan that include marketing, financial and human resource required, the service

provided, the other input required, appropriate locations for their business, even

objective, probable constraint with suggested solution with estimated profit or loss and

other relevant information.

On other hand, as the information from the data has revealed, most of the MSEs operators

who have organized in cooperatives from, delegated someone from the member and run

by only one or more individual(s), which is contrary to a common belief that MSEs

operators do not usually use delegation system.

4.2 Micro and Small Enterprises Environment

28

4.2.1 Policy Change and Impact

The information gathered during the survey indicated that most of MSEs operators do not

receive support from government or non government organizations/institutions. This

implies that so as to help the MSEs operators also has to be remained, but on the other

perspective the Oromia national government has recognized the previous problems of

trade, industry and transport bureau in order to foster the development of MSEs, to

provide different services and support and entrepreneurship. The sample data has

revealed that the outcomes are still remained 70(70%) of the respondents said that they

have not received any training on the entrepreneurship and managing their business. But

some 30(30%) have responded that they have got training from MSEs development desk

and other non government organization. As it is known one of Jimma Town

Administration main problem is unemployment. To reduce this problem, MSEs are

expected to provide more employment, opportunities and foster the process of economic

growth, but the information obtained from a sample data shows that there was little

provision of support from government/NGOs. The support is limited due to several

constraints and prerequisite. Having this problems, the MSEs operator’s responses have

showed that, the most important objective of their business is growth and expansion, i.e.

49(49%).on the other hand, only 27(27%) of them said that their objective is to stability

(earnings) of income and economic security while the other 21(21%) and 3(3%) of them

replied as their main aim as making more profit and survival of their business

respectively.

From the above data one can understand that most of the operators who are engaged in

those MSEs are not willing to take risk for their own business growth and expansion by

being profitable. From this fact it can also justified that taking risk is one of the major

outcome entrepreneur. However, the data revealed that the provision of thinking and

entrepreneurship and management of their business has been promising. Even if it

remains so, these operators have also constraints of finance and therefore expanding their

market and being more profitable is the other questionable. Even though there is a profit

from the business, most of the operators consume their gain than saving in order to re-

invest for their business expansion.

29

Table 4.2.1.1 Summary of Important Objective of the Business

Important Objective Number of Respondents Frequency Percentage

Business growth and expansion 49 49

Making profit 21 21

Survival of business 3 3

Stability of income and economic

security 27 27

Total 100 100

Source: Sample survey (2010).

According to information assessed by a sample survey indicated, the main important

market-related obstacle to MSEs business expansion and growth are shortage of finance

43(43%), uncertainty of market 33(33%), lack of credit access 13(13%), high competition

in the market 6(6%) and inadequate business support service which is about 5(5%) of the

total sample.

Table 4.2.1.2 Market Related Obstacle of MSEs Growth and Expansion

Constraint/Obstacle Number of Respondents Frequency Percentage

Shortage of finance 43 43

Uncertain market 33 33

Competition 6 6

Lack of credit access 13 13

Inadequate business support

services 5 5

Total 100 100

Regarding the three most important rule/regulation related obstacles expand and growth

of business, 46(46%) replied as high collateral requirements, 33(33%) them replied as

bureaucratic processes and some other 11(11%) high tax. Due to this draw backs the

30

MSEs operators are not able to expand their business, rather they stand on consumption.

Furthermore, the data revealed that about 3(3%) and 7(7%) of them felt an obstacle of

power interruptions and problem of lack of business premise respectively.

Table 4.2.1.3 Rules/Regulations Related Obstacles to MSEs Growth and Expansion

Constraint/Obstacle Number of Respondents Frequency Percentage

High tax 11 11

High collateral requirements 46 46

Lack of business premise 7 7

Power interruption 3 3

Inefficient tax administration - -

Bureaucratic requirement 33 33

Entry regulation - -

Total 100 100

Table 4.2.1.4 Changes Observed in MSEs Sector After the Reform (1997)

Changes observed

Increase a lot

Increased slightly

Decreased slightly

No change Do not know Total

Freq. % Freq. % Freq. % Freq. % Freq. % Freq. %Investment 44 44 38 38 1 1 5 5 12 12 100 100

Competition 83 83 17 17 - - - - - - 100 100

Infrastructure 31 31 65 65 - - 4 4 - - 100 100

Support of

government 34 34 26 26 7 7 15 15 18 18 100 100

Access to

finance 7 7 8 8 30 30 35 35 20 20 100 100

Prices of

inputs 94 94 6 6 - - - - - - 100 100

Policy reforms on MSEs development does not necessarily results with enhancing of in

increasing development and productivity of MSEs, and it could also do not necessarily

mean launching an enabling environment by itself is a sufficient thing to get a highest

31

results. Accordingly, the data gained from sample respondents revealed that, changes

observed in MSEs sector after a reform period (1997 E.C) in investment, infrastructure,

competition and support of government are promising and they have shown increasing. It

has also observed that access to finance for MSE sector has shown decreasing trends but

the prices of inputs are increased a lot.

Table 4.2.1.5 Summary of Respondents on Improvements of the Overall Policy

Environment of the Reform (Overall)

ResponsesIs there improvement?

Number of RespondentsFrequency %

Yes 54 54

No 46 46

Total 100 100

The sample data also showed that, there has been a little improvement in the policy

environment. This can easily be seen in Table 4.2.1.5 which shows 54(54%) of the

sample respondents are proved that there is improvement in overall policy environment

whereas 46(46%) of them have replied as there has not been seen in any improvements in

the overall policy environment.

Although the government has been designing to empower women in various strategies to

create a conducive and favorable environment for women, the female respondent said

that the actual implementation and improvements on MSEs sector still needs more

improvements.

Table 4.2.1.6 Summary of Respondents on Improvements in the licensing procedure

ResponsesIs there improvement in licensing?

Number of RespondentsFrequency Percentage

Yes 71 71

32

No 29 29

Total 100 100

As the information gained from sample survey (Table 4.2.1.6), there has been a great

improvement in the licensing procedure undertaken by the town administration, if all the

necessary requirements are fulfilled, it can be gained within an hour.

Table 4.2.1.7 The Perceived Degree of Predictability of Changes in Laws, Rules and

Policies of the Government

Predictability of changes in laws, rules and polices of government

Number of RespondentsFrequency Percentage

Completely predictability 6 6

Fairly predictability 65 65

Highly predictability 4 4

Unpredictability 17 17

Do not know 9 9

Total 100 100

According to the respondents, change in laws, rules and polices of the government is

quite promising as to them, about 65(65%) said that it is fairly predictable, other 6(6%) of

them have replied as completely predictable, 4(4%) said as it is highly predictable and the

rest 17(17%) and 9(9%) of them replied as it is unpredictable and as they do not know

whether it is predictable or not. And the respondents said that expected government

adherence to and implementation of policies and participation of MSEs operators in

designing rules/regulations comparing (relative) to the past periods has shown

improvements.

33

CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1 Conclusion

This paper has focused primarily on the challenges and prospects of MSEs in economic

growth and reviewing the present trends of the policy, legal and regulatory environment

in designing and provision of support and services and the overall obstacles and

improvements encountered in the businesses. Accordingly based on the data obtained

from the sample respondents. The researcher has concluded the following. Even though

there has been serious changes taken by government to improve the policy and regulatory

environment of MSEs sector, which has resulted in increasing investment, infrastructure,

as well the study confirmed that there is divergence between policies and directives

issued and their actual implementation on ground.

The sample survey revealed that an average, at least 10 persons including the

owner are dependent on income gained from MSE businesses. But their initial

capital is likely low, (<1000) to earn higher income through expanding their

business and get more profit.

It is also concluded that all MSEs operators are literate but their educational

status before and after starting their business did not show significant change.

From the data, it could also be concluded that most of the MSEs sectors are run

by relatively adult operators whose mean age is 32 years. This reveals that

participation of young is low (which of young age is 15-29 years).

It can be concluded that the financial access to MSEs is low, and therefore a

significant number of operators are financed out of personal saving, NGOs or

government support (38%, 29% and 22% respectively), therefore, they are

unsatisfactorily financed due to problems attached to access loan for their

businesses, like: high interest rate, short repayment period and long procedural

formalities.

According to the survey data; gained from respondents, the most dominant factor

which forces MSEs operator to be engaged in their respective field are: to help

their family, self employment, and lack of other alternative (29%, 28%, 16%)

respectively. From this one can observe that, from early, while they start their

34

business, they lack entrepreneurial qualities like initiative, and motivation which

will enhances them for the success of a business, than other external enforcing

factors.

From the study, it has also observed that the main market related constraints

which have hindered MSEs operators from expansion and growth of the business

are finance constraint, inadequate market, lack of credit access which are

accounted for about 43%, 33%, and 13% respectively.

On the other hand, regarding rule/regulation related constraints, it is concluded

that, high collateral requirement bureaucratic (red-tape) are among the most one,

but it is observed that entry regulation, lack of business premises are not

considered as the significant constraints.

Furthermore, from the data collected, it is understood that investment,

infrastructure, and supports of government after the reform (1997 E.C), has

increasing a lot in a town administration, but while collecting the data; access to

finance (loan), is decreasing but in contrary, prices of input has increased a lot.

It can also be concluded, that, a policy environment has shown a trend of

improvement, whereas changes in laws, rules, regulations and policies and

participation of MSEs operators in designing rules/regulations has shown a

considerable improvements relative to past periods.

5.2 Recommendations

The Micro and Small enterprises sectors can be seen as home of entrepreneurship, i.e. it

provides productive and freely chosen employment, enables members to exercise their

talents to the full and attain their goals, it is a way to income creating opportunity, wealth

creations, and increases (if managed well) the participation of disadvantaged and

marginalized groups or society. Furthermore, it is away of augmented domestic savings,

and investments and provides goods and services which are better adapted to local needs,

enhances productivity and technological change, can be good mechanism to decrease

income inequality gap among the societies, activates competition and exploit niche

markets. Generally, in any successful economies, MSEs are an essential engines to bring

economic growth, job creation, and social progress at large. In our country as well,

35

though the importance and contributions of large industries are not denied, MSEs are

playing their role in stimulating the economic development through participation of

significant number of society. Having all this in mind, based on data collected and

conclusions drawn, the following recommendations are proposed to address the main

problems identified:

All concerned bodies an any stakeholders which might play their role in

development of MSEs sectors should be provided a full understandings about the

overall contributions in the entire economic development of the country.

As the survey result have indicated, most of the MSEs operators and owners are

more of adult male entrepreneurs, the package program should gives attention to

increase the participation of young and unemployed women in MSE sector to

mitigate unemployment problem.

It is recommended that, the concerned bodies have to perform a more sustainable

and effective role by operating and discussing with MSEs operators, and should

support the provision of the business development services (BDS) instruments

such as training, access to information, technology development and transfer,

access to larger and more profitable markets, consultancy and counseling services,

and strengthening of the capacity of service providers by enhancing

organizational efficiency, effectiveness and sustainability. And the operators

should be closely supervised.

There should also be a program of experience sharing among MSEs operators

through the concerned offices in order to enhance and fill the gap between low

performer and high performer.

To reduce high town (urban) unemployment and foster the employment

opportunity in these sectors, the town administration should play an active role in

increasing awareness and increase facilities of MSE sectors so as to attract active

participant of the people’s. In this regard, the government have to minimize

unnecessary rules and procedures and strengthen providing technical assistance,

training in business management create marketing information, and empowering

the operators via supporting institutional environment at the local level to develop

urban infrastructure for MSEs.

36

To overcome one of the bottle-necks of MSEs operators, i.e. problem related to

finance (initial capital and working capital), the government should play an active

role in establishment of better micro finance institution with minimum loaning

procedures, longer period of loan repayment, and with reasonable interests, so that

MSE sectors access to get finance to expand the existing business and to attract

additional unemployed individuals. Similar to this, strengthening the existing

micro finance institutions capacity in making loan and creating simple procedure

in finance system may enable to access for initial and working capital.

The Micro and Small Enterprise sector’s capabilities may be enhanced and

empowered if they are represented through organizations such as chamber of

commerce, sector associations and the like. Therefore, creating an organized

MSEs sector is a fundamental requirements for empowerment. It is only through

such organization that the needs and views of these sectors can be effectively

represented, therefore, promotion and improving such organization is

recommended to be done. It is not only through this legal or regulatory

administrative problems could be solved, but also strengthens the collaborations

between government and MSEs while designing, implementing and monitoring

strategic plans for development.

Lastly but not least, insufficient support has to be improved and strengthen for all

the categories of MSEs in the Town Administration.

37

Bibliography

Admit and Getachew, (1995) the role of the private sector in regional economic

development of Ethiopia. Proceeding of a workshop on regional development

planning and policy issue.

Akiko Suzuki (2002) Business training market for MSE in developing countries,

what do we know so far about its potential, ILO publication bureau, international

labour office Geneva, Switzerland

Albert, O.H (1965). The strategy of economic development Yale university, London.

Andeson, D. (1982) small industries in developing countries: a discussion of issue.

World Dev. 10(11) an electronic journal of the US department of state. Vol, 9, No. 1,

Feb 2004 Axe, et al 1993. constraints opportunities for MSE development& out one

proposal for EC support

Bekele Tilahun (1996). “The rule of credit in the informal sector for poverty

alleviation”. In Bereket and Mekonen T. (Ed). The Ethiopian Economy Poverty and

poverty alleviation, Addis Ababa

Berhanu Nega and Befekadu Degefe (2001) “annual report on Ethiopian economy”

A.A

CSA (central statistics authority) 2007 annual statistical abstracts CSA Addis Ababa

Fasika Damte and Daniel Ayalew. (1997). Financing micro and small enterprises in

urban Ethiopia. In: wolday Amha, Chiparied G.MR. Andualem Tegegne (eds) (1997),

Small enterprise development in Ethiopia, proceeding of the sixth annual conference

on Ethiopia economy, Addis Ababa.

Federal Democratic of Ethiopia (November 1997). Ministry of Trade and industry:

micro and small enterprise development strategy. Addis Ababa, Ethiopia Gebrehiwot

Ageba and Wolday Amha (2001) Micro and small enterprises development in

Ethiopia strategy regulatory changes and remaining constraints vol. 10, No. 2 Addis

Ababa.

FEMSWDA (May, 2004) A.A the role of MSE in the economic development

Gerry Finnegan (July, 1999). International best practice in micro and small enterprise

development

38

Getachew Abebe and Getachaw Belay (1997). Micro business development in

Ethiopia, proceeding of the sixth annual conference on the Ethiopia Economy Addis

Ababa

HASIDA (Handcrafts and small scale industries agency). (1985) report on survey of

private manufacturing industries HASID, Addis Ababa.

http://www.bds-ethiopia.net/remseda/oromia.html

http://www.business-ethiopia.com/services.html.

http://www.csa.gov.et/

http://www.ilo.org/pubcgi/links

http://www.ilo.org/pubcgi/links ext.pl?http://www.ids.ac.uk/id21

http://www.mip.org/pubs-def.htm

ILO (2001) Boosting employments through MSE development

ILO (2003) Working out of poverty

ILO (international labor organization), (1987) Small Enterprise development policies

and programs ILO, Geneva

ILO 1997- General conditions to stimulate job creation in Small and Medium sized

Enterprises. Geneva international labor organization

Kasaye Solomon (1999) planning through decentralization towards adopting an

oriented urban planning in Ethiopia, NUPI: A.A

Lois Stevenson and Annette st. Onge (2005). Support for growth oriented women

entrepreneurs in Ethiopia.

Mead, D. (1982 b), small industries in Egypt: an exploration of the economics of

small furniture procedures Intl. J. Middle East studies Michigan state university.

MEDC (Ministry of economic development and cooperation) (1964-1996). Trade and

industry department sector review (compiled Annual documents) MEDAC, Addis

Ababa

MOTI (1997E.C) MSE development strategies

MOTI, 2000 EC plan performance report (in Amharic MOTI, Addis Ababa.

Solomon G. (1993). The condition of the poor in Addis Ababa: a social problem not

yet addressed (3red serious). Dialogue.

39

Streetman, W.P. (1987). Home, based enterprises in cities of developing countries.

Economic development and cultural change 36(1) Chicago.

WB (2001) World Bank group reviews of micro and small enterprises activities

Zewdie and Associates. (2002). Short over view of the MSE sector Addis Ababa.

40

Appendix I

Jimma University

Faculty of Business and Economics

Department of Business Management

This is structured questionnaire prepared to gather some information from micro and small

enterprise operating in Jimma Town Administration for an academic research (only for

fulfillment of BA degree)on the challenges and prospect of MSEs for economic development

with particular references of this sector. I kindly request you to respond for each question

honestly and kindly. I would like to assure you that all the information provided would be kept

confidential.

Thank you for your cooperation:

Instruction: Please Answer the questions either by putting “√” or “X” in appropriate box or

writing down the required word, phrase or sentence on the space provided.

A) Personal details

Age: 14-25 26-35 36-45 46-55 greater than 55

Sex: Male Female

Marital status: Married Single Widowed Divorce

Number of household members_______________

2) Educational level

Illiterate

Literate (Basic Education)

Primary school of first level (1-4)

Primary school of 2nd level cycle (5-8)

High school (9-10)

Preparatory (11-12)

Above high school: Certificate, Diploma, Degree

B) About your business

3) What is the type of your business?_________________________

4) Where did you start your business? Date, month, year _____________

41

5) Did you prepare a business plan before starting your business?

Yes No

6) How much was your starting capital? Specify (in birr) __________

7) What was your source of capital? Identify

Personal saving _______

Saving from other owned business ________

Borrowing from relative/friends _____________

Grant from relative/Friends ______

In heritance __________

Support from government or NGOs ______

Bank and supplies loans ________

Other, specify __________________________

8) How did your start your business? Identify

Start up Buy out other specify

9) Why did you chose this particular business activities

a) Need small start up education

b) Not need higher education

c) Have high profit

d) No option for any other activity

e) Heritage form family

f) For self employment

g) For better income

h) To help family income

i) Skill in this activity

j) No regulatory instruction

10) Identity your level of education on the time of business start:

a) Illiterate b) 1-4 c) 5-8 d) 11-12

e) Diploma degree and above

11) Identity the number of owners involved in this association of MSEs? ___________

12) Identity the type of your business premise

a) Rented Owned Bought

42

Other specify __________________________________________________________

If rented, state the payment per month (in birr) _________________________

If bought state the purchase rice (in birr) _______________________________

If other, specify it? ____________________________________________________

13) What was the most important problem you faced in starting the business?

______________________________________________________________________________

_________________________________

14) Specify the number of works in your business and the composition of labor force number

__________________

composition_____________

15) Did you receive support from government or non government organization/institution?

It your answer is yes for Q.15 above, identify if any

NGOs

Government institution

Training providers

Banks

Micro finance institution

Cooperation

Other ___________________________________________________________

16) Did you receive any training on entrepreneurship and managing your business?

Yes No

17) What is the most important objective of your business?

Identify

Business growth and expansion

Making profit survival of business

Stability of income and economic security

Other specify ____________________________________________________

18) Identify and rank the following market related obstacle and to your business

growth/expansion:

Shortage of capital

In adequate/uncertain market

43

Competition

Lack of inadequate credit access

Inadequate business support service

19) Identity and rank the following rules/regulations related obstacles to your: business

expansion:

High tax

High collateral requirement

Lack of inadequate business premises

In efficient tax administration

Bureaucratic requirement (red tape)

Entry regulation

20) List the top three constraints to your business expansion from the start.

_______________ _____________ _____________

21) Is there any improvement in the policy environment after 1991?

Yes No do not know

22) Is there any improvement in the licensing procedure in the late 15 years?

Yes No Do not know

23) How do you see the changes observed in the MSEs sector after the reform (1997) in relation

to the following? On which you observe any change?

a) Investment

b) Competition

c) Infrastructure

d) Support of government

e) Access to finance

f) Price of in put

Indicate the above increase as:

Increases above as

Increased slightly

Decrease slightly

No change

Do not know

44

24) Identify the perceived degree of predictability of change in laws, rules and police of the

government they are:

Completely predictable

Fairly predictable

Highly predictable

Un predictable

Do not know

25) Identity the expected government adherence to and implementation of polices and degree of

business sector participation in designing rules/regulation as:

Always Sometimes Do not know

Mostly Seldom/never

26) If there is any suggestion or comments pleases write here

__________________________________________________________________

__________________________________________________________________

45

¾ÏT Ÿ}T Sc}ÇÅ` uØnp”“ ›’e}— ›=”}`øô ›ÑMÓKAƒ u}ÖnT>¨< ›=¢•T> ShhM

¾T>•[¨< T>“ “ ÁK¨<” ‹Óa‹ KSK¾ƒ KT>Å[Ѩ< Ø“ƒ ŸÅ”u™‹ S[Í KScwcw ¾}²ÒË�

SÖÃp :

¾²=I Ø“ƒ ¯LT uŸ}T¨< Ønp”“ ›’e}— ›=”}`ø^ô }ÖnT> ›vK<‹ ›=¢•T> ShhM

Là uTIu` }Å^Ï„ ›ÑMÓKAƒ KTÓ–ƒ ¾T>•[¨< T>“ “ ‹Óa‹” KSK¾ƒ (KSn–ƒ) ’¨<::�

KØ“~ eŸ?ƒ ¾`e ¾}TEL ULi ¾T>•[¨< É`h ŸG<K<U ¾Lk ’¨<:: eK²=IU KÒ^

ØpU c=vM uS<K< p”’ƒ ƒ¡¡K— ULi ÃcÖ<˜ ²”É uLp ›Ÿwaƒ ÖÃnKG<:: Kƒww`

wpÉT>Á ›SeÓ“KG<::

KSËS]Á Ç=Ó] TTEÁ ƒUI`© Ø“ƒ“ ¾›Ø–>¨< eU Ñ’ƒ }U\ ›[Ò::

SMf” KÁ”Ç”Æ ØÁo u}cÖ¨< dØ” ¨<eØ #$ uTÉ[Ó “ u}cÖ¨< vÊ x Là Hdx”

ÃÓKèM”::

1) ¾ÓM S[Í u}SKŸ}

1.1 S<K< eU /u›T^ß T>VL/-------------------------------------------------------------

1.2 ÉT@ 14-25 26-35 36-45 46-55 Ÿ55 uLÃ

1.3 ï} c?ƒ ¨”É

1.4 ¾u?}Ww w³ƒ c?ƒ ¨”É ÉU`

1.5 u^d†¨< ¾Ñu= U”ß ¾K?L†¨<“ u`e e` ¾T>}ÇÅ\ c‹ w³ƒ

c?ƒ ¨”É ÉU`

1.6 ¾u?}Ww G<’@ ÁÑv/‹ ÁLÑv/‹ ¾ð/‹

1.7 ¾ƒUI`ƒ G<’@

1.7.1 ÁM}T[/‹ 1-4 5-8 9-10 11-12

uc`}õŸ?ƒ Ç=øKAT Ç=Ó] Ÿ²=Á uLÃ

2. ¾Y^ G<’@” u}SKŸ}

2.1 uØnp”“ ›’e}— ›=”}`ø^ô }ÖnT> ŸSJ”U uòƒ e^ ’u`;

› ›M’u[˜U

2.2 KØÁo 2.1 SMe ›” ŸJ’ e^ U” ’u`;

-----------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------

3. uØnp”“ ›’e}— ›=”}`ø^´ Ò` }²TÏ’ƒ ÁL†¨< ’Ña‹ u}SKŸ}

3.1 ”ÓÉ U” ›Ã’ƒ ’¨<

46

gk×gkØ ‹`‰a w[ w[ƒ ¾”Úƒ ¨<Ö?„‹

UÓw c`„ SgØ

›ÑMÓKA„‹ ìÑ<` u?ƒ ¾¨<uƒ dKA” Mwe eôƒ

iS“ K?KA‹ e^‹

3.2 ”ÓÉ SŠ }ËS[ k” ------------- ¨` ---------------- ¯.U.

3.3 ”ÓÉ c=ËU\ S’h "úM e”ƒ w` ’u`;

1000 w` u‹ 1000-10000

10001-20000 20001-500000

3.4 ”ÓÉ ¾S’h "úM U”ß Ÿ¾ƒ ’u`

Ÿ^e lÖv

Ÿu?}cw lÖv

Ÿ²SÉ/ŸÕÅ— ŸwÉ` ¾}Ñ–

Ÿ²SÉ/ŸÕÅ— u¨<`e ¾}Ñ– eÙ

ŸS”Óeƒ/ŸS”Óe© ÁMJ’ É`σ ¾}Ñ– wÉ`

Ÿv”¡/Ÿ›uÇ] É`Ï„‹ ¾}Ñ– wÉ`

lw uS×M ¾}ј Ñ”²w

KK?L ¨Ñ” "K ÃÑKî

3.5 ”ÓÉ” ”ȃ ËS\

ØpS<” uS[ǃ K?KA‹ e‹ e^¨<” eKËS\ Ÿ`c< ›ÃŠ ËS`Ÿ<˜ ɔу ¨Å²=I e^

ÑvG< ›T^ß eL×G<˜ e^ Ø eKJ”Ÿ<

K?L "K ÃÑKî

------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------

3.6 `e ÃI”” ›G<” ¾’ÑÆ ¾ÁK<ƒ” ”ÓÉ” KU” K=S[Ö< ‰K<;

ƒ”i S’h "úM w‰ eKT>ÁeðMÓ

e^¨<’ KSeƒ w²< ¾ƒUI`ƒ Å[Í eKT>ÁeðMÓ

Ÿõ}— ƒ`õ eKT>•[¨<

K?L ›T^ß cK›×G<

uMUÉ Ÿu?}WxŠ uS¨<[e

^c?” KS‰M

Ø\ Ñu= ”Ç=•[˜

47

u?}WxŠ”/MЊ” KS[ǃ

u²=I Y^ Ø\ ‹KA ”Ç=•[˜

e^¨< uQÓ eKTßKŸM w‰

U”U ›Ã’ƒ ¾}hK Y^ eL×G<˜

K?L "K ÃÓKì<

------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------

3.7 ”ÓÉ uØnp” “ ›’e}— ›=”}`ø^ô ¾T>ËU\uƒ Ó²? ¾ƒUI`ƒ Å[Í U” ÃSeM ’u`;

›M}T`Ÿ<˜U

Ÿ1— - 4— ¡õM

Ÿ55-8— ¡õM

Ÿ9—-10— ¡õM

Ÿ11—-12— ¡õM

Ç=øKAT

Ç=Ó]“ Ÿ²=Á uLÃ

3.8 uTIu^‹G< ¨<eØ ÁK<ƒ vK ›¡c=Ä•‹ e”ƒ “†¨<

¨”É c?ƒ ÉU`

3.9 ¾”ÓÉ ¾Se]Á x ›Ã’~” ÃÓKè

uSŸ^¾ƒ uSÓ³ƒ ¾ÓM

’í ŸS”Óeƒ KÓ²?¨< uTÓ–ƒ

K?L "K ÃÓKì< ------------------------

Ÿ}Ÿ^à u¨[ U” ÁIM w` ßõLK<; -------------------

ŸÑ²< uU” ÁIM w` Ѳ<; -----------------

K?L "K ÃÓKè -------------------

3.10 ”ÓÉ” uËS\uƒ Ó²? u×U ›e†Ò] ¾J’<uƒ ‹Óa‹ U” ’u\;

¾Ñ”²w Ø[ƒ

¾x Ùƒ

›pU T’e

¾wÉ` Ñ<ÇÃ ›KSe}"ŸM

ªe ¾T׃ ‹Ó`

”w[ƒ ›eõ uTuÅ` ”w[ƒ YKK?˜ ‹Ó`

48

¾”ÓÉ Y^ ¨<kƒ T’e

u›vKA‹ S"ŸM ›KSÓvvƒ ‹Óa‹ S•`/SðÖ`

Ñ<Ç¿‹” KTeðìU ¾TÑ<LLƒ ‹Óa‹

ŸLà u}²[²\ uS<K< ¾T׃ ‹Óa}

K?KA} ‹Óa} ŸG<K<U ueóƒ ÃÖke

------------------------------------------------------------------------------------------------------------

-------------------------------------------------------

3.14 K”ÓÉ wKA ŸS”Óe©/S”Óe© ÁMJ’< É`Ï„‹ ÉÒõ ›Ó˜}ªM;

› ›ÃÅKU

3.15 SMe ¾ØÁo 3.14 › ŸJ’ Ÿ¾ƒ—¨< ”ÅJ’ ÃÑKê ;

Ÿ`Ç cß É`σ

ŸS”Óeƒ ÁMJ’< É`Ï„‹

ŸS”Óeƒ }sTƒ

ŸeMÖ“ ›p^u=‹/cÜ‹

Ÿv”¡

ŸTáa ¡õKA‹

Ÿ›Å^Ï ¡õKA‹

ŸK?LU "K ÃÑKî

3.16 ”ÓÉ KThhM u›=”}`ø\’>¾` “ ”ȃ ”ÓÉ É`Ï~” KTe}ÇÅ` ”Ç=‹K< eMÖ“

¨eŪM;

› ›M¨cÉŸ<U

3.17 SMe uØÁo 3.16 LÃ › ŸJ’

e”ƒ Ó²? ¨eŪM --------------

uT” ›p^u=’ƒ ¾}²ÒË eMÖ“ ------------------------

ŸeMÖ“ u%EL }ÖnT> J•ªM; › ›ÃÅKU

U”U ›MÑv˜U eMÖ“¨< Ÿ‹KAÁ u‹ ’¨<

eMÖ“¨< Ÿ‹KA uLà ’¨<

3.18 ¾”ÓÉ ƒMl ›LT U”É’¨<;

”ÓÈ” KTdÅÓ“ KTeóóƒ

49

ƒ`õ KTÓ–ƒ

u”ÓÉ ÑuÁ w‰ KSq¾ƒ w‰

¾Ñu=” “ ›=¢•T>” ¨eƒ“ KT[ÒÑØ

K?LU "K ÃÑKî ----------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------

3.19 ¾’ÓÉ TÅÓ“ Teóóƒ ŸÑuÁ“ ÑuÁ ’¡ "MJ’< Ñ<ÇÄ‹ Ò` ¾}ÁÁ² ƒMl ”póƒ ¾J’uƒ

UӃլ<;

¾"úM ¾Ñ”²w Ø[ƒ

¾ÑuÁ ›e}TT˜ ›KSJ”

¨<ÉÉ`/uÑuÁ Ÿõ}— ¨<ÉÉ` S•\

wÉ` ueóƒ ›KS•`

¾”ÓÉ MTƒ ›MÓKAƒ vKS<Á Ø[ƒ

K?L "K ÃÑKî

------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------

3.20 ¾”ÓÉ TÅÓ“ Teóóƒ ŸS”Óeƒ QÑA‹ Å”x‹ “ SS]Á‹ Ò` u}ÁÁ² ƒMl ”póƒ/‹Ó`

¾ÑÖVƒ

›pT‹”” ÁLÑ“²u ¾S”Óeƒ Ów` eKSÖ¾p

KSuÅ` Ÿõ}— ¾SÁ»Á ªeƒ“ u?ƒ ¨ÃU K?L SÖ¾p

ueMÖ“†¨< ÁK ›Óvw SÖkU eK ›K

¾Ów` ›evcw ¡IKAƒ Sw³ƒ

¾u=a¡^c= ¨<ר<[É Sw³ƒ

¨Å ”ÓÉ ›KU ”É”Ñv ¾T>Áu[ H>Ń eKK?K

QÑ< ^c< eK TÃÒw´

3.21 Ÿ1983 ¯.U. S”Óeƒ þK=e‹ uØnp”“ ›’e}— ¾”ÓÉ ›=”}`ø^õ‹ Là ¾}hhK

QÔ‹ Å”x‹ SS]Á‹ ›K<; › ›L¨<pU

3.22 Ÿ1987 ¯.U. u%EL eK”ÓÉ e^ ðnÉ ›c×Ø ¾}hhK< QÔ‹“ Å”x‹ SS]Á}

S•^†¨<” Á¨<nK<; › ›K¨<pU

3.23 Ÿ 1997 ¯.U. u%EL uØnp”“ ›’e}— ¾”ÓÉ ›=”}`ø^õ‹ ¾}K¨Ö<ƒ ÉÒõ ŸSeÖƒ

›”é` Ÿ›=”geƒS”ƒ ¾ÑuÁ ¨<ÉÉ` ¨<H'Sw^ƒ' eM¡ ŸS”Óeƒ ¾T>cÖ¨< ÉÒõ ¾wÉ`

›ÑMÓKAƒ ŸØ_ n‹ ªÒ ›”é` c=Ã

50

u×U ÚUbM

uSÖ’< ’¨< ¾ÚS[¨<

uƒ”g< k”eªM

U”U K¨<Ø ¾KU

›L¨<pU

3.24 K”ÓÉ ›K Teóóƒ ª“ ª“ ‹Ó` S”e›?‹ ¾J’<ƒ” w‰ ÃØkc<

1. ------------------------------------------------------------------------------------------------------

2. -----------------------------------------------------------------------------------------------------

3. -----------------------------------------------------------------------------------------------------

51