The micro enterprises are categorized into different scales of operations based on the size and nature of

employment that was in use classifies enterprises into different size categories based on number of
workers as criteria. For example, according to the CSA, micro enterprise is one with less than 10
workers. Accordingly, it sub-divides micro enterprises into informal sector operations and cottage
industries. Cottage and handicraft industries are those establishments performing their activities by hand.
The informal sector is defined as household type establishments or activities which are non -registered
and operating with less than 10 persons. For the ease of consistency and comparability of various data,
this study has adopted the definition given by the MoTI. For the purpose of directing its policy and
program support, the Ministry of Trade and Industry (MoTI) adopted definition of micro small and
medium enterprises based on paid up capital. Micro enterprises are those business enterprises with a paid
up capital of less than birr 20,000 and excluding high-tech consultancy firms and technology
establishments FMSEDA (Federal Micro and Small Enterprises Development Agency, 2007).