DEBRE MARKOS UNIVERSITY

COLLAGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

The Contribution Of Micro And Small Scale Enterprise For

Unemployment Reduction In Case Of Debre Markos Town

BY ID

WUDU ANLEY………………………………. 1567

BEZAWIT MOSSU……………………………. 1522
GEDEFAW AJANAW…………………………… 1533

A Research Paper Submitted To Debre Markos University College Of

Business And Economics Department Of Management Program As
Partial Fulfillment Of Bachelor Of Art(BA)Degree In Management

Advisor: Birhanu Asfaw

JUNE, 2011
DEBRE MARKOS, ETHIOPIA

1
Acknowledgment
First of all we would like to thanks gratefully to God for giving us the strength to bring our long
time dream in to reality, secondly we would like to extended most profound gratitude sincere
appreciation to Birhanu A. our adviser and guidance were valuable to the completion of this
paper, thirdly we would like to thanks to our family in assisting financial aspect to do this paper
and finally, we would like to a special gratefulness to micro and small scale enterprise of an
employment in Debre Markos town and done so much on the process of data collection and who
provide us the necessary information

2
Abstract
The primary objective of this study is to assess the contribution of micro and small scale
enterprise in unemployment reduction, in case of Debre Markos town. The researchers used
descriptive research design. The data was collected by primary and secondary data, primary data
was collected by questioners and secondary data was collected through annual reports,
organizational manual and documents. To achieve objective of the study 98 questionnaires were
distributed for sampled and only 90 questionnaires were collected and the remains 8
questionnaires were not collected due to lack of time, carelessness and unwillingness of some
members of employees to give information. The researchers after collecting the distributed
questionnaires organize and analyses the data through tables, percentage and frequencies. Finally
conclusion and recommendation were forwarded based up on the major finding of drawn from
data analysis.

II

3
Tables of contents
Content Pages
Acknowledgement……………………………………………………………….…….…...I
Abstract………………….………………...………………………………………….….….II
Lists of tables……………………………………………………………………….……….VI
CHAPTER ONE…………………………………………………………………………1
1, Introduction…………………………………………………………………………...…1
1.1, Background of the study…………………………………………………...…………1
1.2, Statement of the problem …………………………………………………….…….....3
1.3, Objective of the study ……………………………………………………….…...……4
1.3.1, General objective …………………………………………...…….……………4
1.3.2, Specific objective …………………………………………..…….…………....4
1.4, Significance of the study………………..………………………………...………….4
1.5, Scope of the study …………….……………………………….….………………….4
1.6, Limitation of the study …..…...……………………………….….…………………..5
CHAPTER TWO……………………………….…………………………………..…..6
2, Review of related literature ………….…...……………………….………………….6
2.1, Definition and Concepts ………………………………………..…………...…...6
2.2, Two approach of micro and small enterprises…………………..………………...6
2.3, The role of Micro and Small scale enterprises on economic development …...…..7
2.4, General characteristics of micro and small scale enterprise ………….……….…..7
2.4.1, Low initial capital and high labor intensive …………….……………..….7
2.4.2, Mobilize local resources efficiently ………………..……………...…..…..8
2.4.3, Family owned enterprises …………………………...………………...…...8
2.4.4 , Poor management structure ………………………..……………………….8
2.5, The key role of Micro and small scale enterprise……..…………...…………………..8
2.5.1, MSES and Innovation ……………………………..………………………...9
2.5.2, Micro and small scale enterprise and Human resource development …………9
III

4
2.5.3, MSEs and Income generation……...…………………...…………..10
2.5.4, Promote women entrepreneurship and gender equality…………….10
2.6, Informal sector of MSEs ………………………………………...…...………….10
CHAPTER THREE………...………………………...………………………..11
3.1, Research Methodology ……………………………………………….………..11
3.1.1, Research design ………………………………………………..…………11
3.1.2, Sources of data …………………………………………………..………..11
3.1.3, Target population .…………………………………………………………11
3.1.4, Data gathering tools …….………………………………………………….12
3.1.5, Data analysis ……………………………………………………………….12
3.2, Time schedule …………………………………………………………….……….13
3.3, Budget breakdown ………………………………………………………………...14
CHAPTER FOUR…..……………………………………….………..………..15
4. Data Presentation,Analysis and Interpretation………………………………….…….15
4.1 response rate………………………………………………………………...…….15
4.2 background of the respondent…………………………………………………..…15
4.3 enterprise year of establishment……………………………………………...…….17
4.4 types of small business………………………………………………………….….18
4.5 previous job and response of for joining micro and small scale enterprise………...19
4.6 enterprises access to finance……………………………………………………......20
4.7 the advantage of micro and small enterprise…………………………………..……20
4.8 sources of capital…………………………………………………………………………..21
4.9 micro and small scale enterprise contribution for unemployment reduction.………..22
4.10 support from government………………………………………………………………......23
4.11 types of government support to micro and small scale enterprise…………………… 23
4.12 profitability of business/growth rate………………………………………………………..…..24

IV

5
4.13 measurement of growth rate…………………………………………………………………....25
4.14 attitude of unemployment person and society towards micro and
small scale enterprise………………………………………………………………….…..26
4.15 contribution of micro and small scale enterprise to solve unemployment………….….. 27
CHAPTER FIVE………………………….………………………………….……...28
5 Conclusion and Recommendations……..…………………………………….…...28
5.1 introduction…………………………………………………………………………………......28
5.2 conclusion…………………………………………………………………………………….....28
5.3 recommendation……………………………………………………………………………….....29
REFERENCE…………………………………………………………………………….…..30

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Lists of Tables

Contents Pages
Table 3.1: time schedule……………………………………………………………………….
Table 3.2: budget breakdown ………………………………………………………………..
table 4.1: demographic characteristics of respondent………………………………………….
Table 4.2: distribution of respondents by years of establishment……………………………….
Table 4.3: response about types of small business……………………………………………….
Table 4.4: distribution of respondents reason for joining micro and small scale
enterprise sector………………………………………………………………………..
Table 4.5: distribution of respondents access to credit……………………………………………..
Table 4.6: distribution of respondents contribution of micro and small scale enterprise ………...
Table 4.7: initial sources of capital………………………………………………………………...
Table 4.8: distribution of respondents by current member of employment………………………..
Table 4.9: distribution of respondents training government……………………………………….
Table 4.10: type of government support to micro and small scale enterprise ………………….
Table 4.ll: profitability of business/growth rate …………………………………………………..
Table 4.12:measurement of growth rate ………………………………………………………
Table 4.13: attitude of unemployment person and society towards micro and small
scale enterprises ……………………………………………………………………...
Table 4.14: the contribution of micro and small scale enterprise to solve
unemployment problem……………………………………………………………...

VI

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CHAPTER ONE
1. INTRODUCTION
1.1 Background of the Study

Amhara region develops micro and small scale enterprises development and promotion strategy
in 1995. This strategy aims at creating an enabling environment for this establishment of micro
and small scale enterprises in the region in order to create term employment and facilities growth
and equitable development because the informal sector is expected to develop dynamically and
become major job creator in the region.(Ethiopian journal of economy vol.14/2005
The mission for this strategy is to decrease unemployment in some extent. Micro and small
scale enterprise expending and raising in the regional economic development and contributing
for the reduction of unemployment and fulfill enough for survival.
The objective of micro and small scale enterprise are to achieve a better result by coordinating
their knowledge health and labor.
Micro and small scale business enterprises are important to develop and promote saving and
credit services to minimize and reduce the individual impact of risks and uncertainties. To
improve the living condition standard of member by reducing production and services cost by
providing input or service at a minimum cost by finding a better price to their product and
services.
Nevertheless, the concentration of micro and small scale enterprise are not only growing in town
and cities of the region but also it is becoming field of income earning for the rural landless and
unemployment.

These enterprise with diversified economic activities and with a wide range of capacity
contribute more to the socio-economic development of a country.(Assefa Tasisa,June 2014)

8
Micro and small scale enterprise sector in Ethiopia the second larger area of employment
generating sector following agriculture.(Gebre Ageba and Woldey Amha2)
In most developing country the contribution of micro and small scale enterprises appears to have
been increasing overtime . This is an encouraging symptom that markets are working. People are
finding opportunities to practice in ways that empower many people practically included those
that are otherwise most disadvantage.(Gebrehiwot,2006)
Micro and small enterprise is these established with start up with capital less than 20,000 birr and
use unsophisticated technology. Where as, micro and small scale enterprise are those established
with start up capital less than 50,000 birr and do not use high level technology.
Recently, the federal government of Ethiopia has recognized and has given due attention for the
sector. Understanding the micro and small scale enterprises are important vehicle to address the
challenges unemployment.
Socioeconomic and more importantly it is the instrument in the fulfillment of the global target of
reducing the percentage of people living below poverty line. (Tsegaye,2013)
Creating employment and generation income is under the federal micro and small enterprises
development strategy of the country. Micro and small scale business enterprises are believed to
play significance role in creating massive job opportunities and favorable basis for gross value
production and value addition in the town.
Unemployment is mainly influence in social and economic condition for social activities mainly
influences stabilization to social life,not fulfill daily income,politically if there is excessive
unemployment in one country there is dangers for government, there is no effectively
administration increasing today.(Yinge Alemu,1993)
Mainly in developing country the main cause for unemployment there is no enough
capital,political stability, understanding the attitude of people to work less government initiatives
for giving money, training etc. (Gebrehiwot Ageba and Wolday,2006)

9
1.2 Statement of the problem
To alleviate the unemployment problem, Attention should be focused on the simulation of
growth in all sector of the population, Urban as well as rural to reach target group such as those
in the informal sector of the unemployed youth. Assessment effort regarding the characteristics
of unemployed person are deem necessary for providing lasting solution to the problem. Micro
and small scale enterprises have a result great power of opening employment for people .
(Mengeinson,2006) Several peoples who capable of working and also eager to do have stay with
out job for the long period of time.
The Amhara regional national state (ANRS) is experiencing population increase with a show
economic growth which resulting in serious socioeconomic problem. Among the many problems
which deserve attention is the steady increment of unemployment.(Ethiopian journal of economy
vol.14(1) 2005).
The need for under taking the research regarding the characteristics of unemployment in Debre
Markos town is being felt as the number of unemployment persons, Particularly educated
unemployment job seeker is growing there by resulting in increasing need for the creation of job
opportunities.
The researcher deals to answer the following basic research questions
1, How the micro and small scale enterprises reduce unemployment?
2, What are factors which are responsible for the reduction of unemployment.
3, Which economic areas covered by micro and small scale enterprise in Debre Markos town ?
4, What is major advantage of micro and small scale enterprises towards unemployment
reduction in Debre Markos town ?

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1.3 Objective of the study
1.3.1 General objective of the study
The general objective of the study is to identify the contribution of micro and small scale
enterprise on reduction of unemployment for people in Debre Markos town.

1.3.2 Specific objective

The specific objective of the study involved in the following
 To identify challenges that micro and small scale enterprises faced in Debre Markos town .
 To know the participation of male and female in micro and small scale enterprise sector.
 To identify factors that motivate people invest in micro and small scale enterprises.
 To identify the role of stake holders in unemployment reduction on micro and small scale
enterprise.
1.4 Significance of the study
The significance of the study emanate easily to understand the contribution of micro and small
scale enterprise in the process of reduction of unemployment process. It could be used as spring
boards for decision makers. Researchers and other interested group were implement this study to
achieve the objective of reduction unemployment process .
The studies therefore contribute some relevant information to policy maker and strategy
formulate for concerning the activities of micro and small scale enterprises particular in Debre
Markos
town. It is also in the assumption that the paper may serve as base for those individual who are
interested to made further detailed investigation in the sector.
1.5 Scope of the study
The scope of the this study geographically limited to Debre Markos town with a specail
reference of micro and small scale enterprise office in Debre Markos town . The area is selected
because, the area which the researcher known mostly, and for the closeness of the town. This
enables to investigate the study deeply in the town .
4

11
1.6 Limitation of the study
This particular researcher has its own limitation on the areas of methodology´s geological
coverage and application, and on its subjects. In such regards this research is the following
specific limitation; methods and materials that are used more qualitative geographically it is
limited to a single office only then its final output may not work in other organization, and the
subject of this study is only current employees. And unavailability of respondents; time
constraint in accessibility of written documents related with the study

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CHAPTER TWO

2. Review of related literature

2.1 Definition and concepts

There no universally accepted definition of micro and small scale enterprise. Definition the
fundamental issue facing all there who understand what exactly micro and small scale enterprise
is and when does become medium enterprise of large sized firmer policy maker, organization
,researcher advisor allure arrange of the term interchange. Because in their effort to describe
micro and small scale enterprise. To men town only few there include small business, small and
medium enterprise,micro enterprise, small farm and etc. secular definition exist all micro and
small enterprise by vary from country to country and varying between reporting micro and small
scale enterprise statistic. The commonly use criteria at natural level to assert investment level
and sales turnover.(Stokers,1995)

2.2 Two approaches of micro and small enterprise

1, quantitative definition; A definition which rely on clearly defined partners or combination

of parameters which include some or all of the following like number of employees saller
turnover asset capital network, there clearly identify which enterprise require special treatment.
(H/Michaeal,2010)

2,qualitative definition; A definition which are in heartily subjective broad bred endless
precise than quantitative one tend to be limited use and purpose generally, this approach look in
the operational style degree of specialization over all aimer and objective or the relating with
enterprise such qualitative definition are micro and small scale enterprise are going prominence
the perception of the interpreters there who see little focusing on their role in development such
at creation of employment opportunity income distribution.(H/Micheal,2010)

13
2.3 The role of micro and small scale enterprise on economic development

The contribution of micro and small scale enterprise in an economy her frequently been
undermined and even misinterpreted (Dagim,2007). In the past small business were believed to
hinder economic growth by attracting scarce resource from their large counter parts (Act and
Avdretch,1993)

The emergence of computer based technology in production administration and information her
reduced the rule or economics of scale in many sectors. Based on (Acrandavdretch,1993) they
have shown a shift towards an increased role for small business or enterprise micro and small
scale enterprise different from large scale enterprise in their many aspects innovations,
uncertainty evaluation (Javedetal,2011).

2.4 General characteristics of micro and small scale enterprise

Micro and small scale enterprise have characteristics that justify them in promoting development
strategy. They use mainly local resources promote the innovation and use of local technology
they also provide skills and training at low cost to the society. micro and small scale enterprise in
most countries share generally common characteristics with very few variation especially
development countries have similar characteristics micro enterprise (ILO,1989).

2.4.1 Low initial capital and high labor intensive

Start up capital her been among the basic characteristics of micro enterprise, many micro and
small scale enterprise start operations with very low amount of capital owing to the nature of
operator. The reason for choosing the activity indicate that initially micro and small scale
enterprise operations starts business with very low amount of capital. micro and small scale
enterprise are low capital intensive and high labor intensive.

14
2.4.2 Mobilize local resources efficiently

Production in small business informal sector user domestic labor and raw materials more
intensively than large scale business their technology more and flexible then large forms. They
innovate particularly in their ability to recycle worn out material micro and small scale enterprise
by making use of predominately local resource engage in the production of feeds and services of
nags consumption and stimulated the growth of the economy.(Naoti,1997)

2.4.3 Family owned enterprise

Owner ship of business influences success through risk taking and their by affecting investment
on enterprise . More micro and small scale enterprise are established and at the same time owned
the family members. In this case the family member play a dominant role in insuring continuity
and support and necessary network with in a country. This explained ability to take flexible
decisions, affording less bureaucrat and taking timely.(Mansour,1999)

2.4.4 Poor managerial structure

Most micro and small scale enterprise are owned and managed one personal who take of all
managerial kiting, production account etc. There heavy loads in the owner manager prevent them
from working out proper strategic plans for their business as they are usually bagged down with
problem of daily running.(Advalem,1997) as cited in Dagim,2010

2.5 The key roles of micro and small Scale enterprises

Micro,small and medium enterprises play key role in the economic wellbeing of developing
countries they have been identified to jobs through innovates and creatively as well as aiding
human resource development. The immediate and the long run effect is that they affect level of
income and ultimately contributing to poverty alleviation.(Danil,2010)

15
2.5.1 Micro and small scale enterprise and innovation

The role of innovation for entrepreneurial success war first explained by (Schumpeter,
1934).Schumpeter em placing that innovation leads to the introduction of new goods and
services through any combination at the existing resource. Schumpter attests that firms that only
that that engage in innovation at atrocities are dubbed to be entrepreneurial. The augments
schumpterian theory but add concept such as novelty, creative process,experimentation and
technological process the argue that innovativeness repents willingness to depart from old
method of production or service delivery and does not necessary mean radical ways of changing
in doing southing.(Lumplsm and Der,1996)

2.5.2 Micro and small scale enterprise and human resources development

Several of the informal training and on the job training occur in micro and small scale enterprise,
for instance in Ethiopia areas where such entrepreneurial training typically takes place include:-

-Traditional catering

- Mechanic shops

- Hair dressing and barbering

- Food and beverage providing

- Furniture design and carpentry

- Electrical repairs ( radio,television etc )

The human resource development comes through an active participation of training of the job.
The micro and small scale enterprise owner usually surprise the trainee to develop his or her
skill, experience knowledge and ability over period of time (levy and Powell,2005).

16
2.5.3 Micro and small scale enterprise and income generation

The role of micro and small scale enterprise in economic growth and development involves more
than just increasing precipitate output and income,it involver initiating and consulting change in
the structure of business and societies. This change is accelerated by growth and increased output
which allows more wealth to be divide by the various participants small entrepreneurial firms
have found to have relationship with economic property as they serve as a source of government
tax revenue,contribute to growth domestic product, providing of flexible specialized goods
service serving as source of industrial innovation.

2.5.4 Promote women entrepreneurship and gender equality

Women face particular barriers in their struggle against poverty and often require targeted support
instating or expanding enterprise (Belay,2007). Women’s entrepreneurship is promoted through specific
projects and through the main streaming of gender in other small enterprise activities micro and small
scale enterprise sector are particularly important for women since they offer more flexible less restrictive
form of employment.

2.6 Informal sectors of micro and small scale enterprise

There are overlapping definition between informal sector and micro and small enterprise. Especially in
developing countries where their economies are largely dominated by informal sector the majority of
micro and small scale enterprise are arranged in the sectors. The major of the world workers are
participating in small scale enterprise,a large proportion of which operates in the informal economy(Essie
Clark,2012).

10

17
CHAPTER THREE

3. RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

The research design was descriptive survey research design. This type of design allows to obtain
characteristics of particular issue or problem and for the purpose of collected data. It can help to describe
the characteristics of micro and small scale enterprise (MSEs) including their role on unemployment
reduction that in Debre Markos town.

3.2 Sources of Data

In this study the primary and secondary data collection instrument were used. The primary data were
collected through questionnaires. Secondary data were obtained from annual reports, organization
manuals and documents. The primary data were gathered using open and close-ended questionnaires.

3.3 Target population

The researcher used simple random sampling technique because it is very easy and easily predictable
procedure of selecting sample with homogeneous population’s. In order to determine the sample size, the
researcher used the following formula of (yemane taro,1967).

n=N/1+N(E)2

based on this formula 90% of confidence level our level of significance from total target population of
4696 micro and small enterprise.

n=N/1+N(E)2 n= Sample size E= Margin of error

n=4696/1+4696(0.1)2=98 N= Total population

Therefore the researchers selected 98 population randomly from a given total population of micro and
small scale enterprise in Debre Markos town.

3.4 Data gathering tools

The researcher used both questionnaires /structured and interview method to gather primary data. The
questionnaires are open and close-ended questionnaire.

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3.5 Data analysis

The collected data will be analyzed by using percentage method since percentage method which express
the proportion of certain values. Moreover tables are presented to assist and create better understanding
about the study collected by questionnaire method.

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CHAPTER FOUR

4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION

This chapter of the study deals with data presentation,analysis and interpretation of the results. This
research used questionnaires and interview as method for data collection. It will start with personal and
present of micro and small scale enterprise characteristics start up capital source of initial capital and
contribution of micro and small scale enterprise to unemployment reduction.

4.1 Response rate

In order to achieve objective of the study 98 questionnaires were distributed for sample of micro and
small scale enterprise operation in Debre Markos town and only 90 questionnaires were collected.

20
4.2 Background of the respondents

item Demographic characteristics respondents

frequency Percentage(%)

Sex

Male 50 55.56
1
Female 40 44.44

Total 90 100

Age

2
Less than 25 36 40

25-35 40 44.44

35-45 10 11.11

Above 45 4 4.44

Total 90 100

Marital status

Married 33 36.67

Unmarried 53 58.89
3
Divorced 4 4.44

Widowed

Total 90 100

Educational level

Illiterate 1 1.11

Primary school 14 15.56

Secondary school 21 23.33

21
4 Diploma 45 50

First degree and above 9 10

Total 90 100

Source own survey,2019

Table 4.1 demographic characteristics of the respondent

The above table shows that out of 90 respondents 50(55.56%) are male and 40(44.44%) are female. This
implies that the majority of micro and small scale enterprise are owned or operated by males and the other
females.

16

Where as regarding the age of the respondents from the total sample population 36(40%) are less than 25
years,40(44.44%) are between 25-35 years and 4(4.44%) are above 45 year. This implies that the majority
of respondents are between 25-35 years old.

With respect to respondents marital status 33(36.67%) are married,53(58.89%) are unmarried and
4(4.44%) are divorced. This clearly shows that majority of participants in micro and small scale enterprise
sector are unmarried.

Where as educated on the above table from total sample population 1(1.11%) are illiterate,14(15.56%) are
primary school,21(23.33%) are secondary school,45(50%) are diploma graduated and 9(10%) are first
degree and above. This implies that the majority of participant in micro and small scale enterprise sector
are diploma at 45(50%).

4.3 Enterprise years of Establishment

The following table presents micro and small scale enterprise year or establishment in which enterprise
are established and started operation.

Description Respondents

frequency Percentage(%)

Years of establishment

Before 2001E.C 4 4.44

22
2001-2004E.C 9 10

2004-2007E.C 37 41.11

After 2007 40 44.44

Total 90 100

Source own survey,2019

Table 4.2 distribution of respondents by years of establishment.

17

The result of the above table show that 4(4.44%)of respondents micro and small scale enterprises where
established before 2001,9(10%)of respondents established 2001-2004year,37(41.11%) of respondents are
established on year 2004-2007 and 40(44.44%) of respondents join the sector by the year after 2007. The
result indicate that the majority of micro and small scale enterprise join the sector after 2007E.C.

4.4 Types of small business

Item respondents

frequency Percentage(%)

Merchandising 32 35.56

Service 43 47.78

manufacturing 9 10

Urban agriculture 3 3.33

construction 3 3.33

Total 90 100

Source own survey,2019

Table 4.3 the business analysis

23
The table shows that from total sampled small business 43(47.78%)of the business covered by service
enterprise, from the total of the respondents 32(35.56%) of the respondent them occupied by
merchandising enterprise,9(10%) of the respondents covered by manufacturing,3(3.33%) of the
respondents construction. We conclude that the dominant micro and small business in Debre Markos
town in service which followed merchandising enterprise.

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4.5 Previous job and response for joining in micro

and small scale enterprise sector

In order to examine micro and small scale enterprise owner or manager experience respondent were asked
their previous work or employment history and to responded why the reason joining in micro and small
scale enterprise sector, The following table summarizes the detail result of reducing unemployment in
micro and small scale enterprise in Debre Markos town.

Description respondents

frequency Percentage(%)

Reason for joining micro and small scale

enterprise sector

Background skill 11 12.22

Expectation of good income 65 72.22

Require low start up capital 14 15.56

Other

Total 90 100

Source own survey,2019

Table 4.4 distribution of respondents reason for joining micro and small scale enterprise sector.

24
The above table show the reason of starting a business and the response of indicates that 11(12.22%) start
business the reason to join business background skill,65(72.22%) expectation of good income and
14(15.56%) require low start up capital. The above response shows that majority pull factor for
respondents to join this business sector followed by expectation of good income at 65(72.22%).

19

204.6 Enterprise access to finance

The following table indicator that access to reduce unemployment for micro and small scale enterprise,
and to encourage job opportunities for the sector,where as response of the care difficult to joining the
micro and small enterprise sector.

Description respondents

frequency Percentage(%)

Have you obtain any credit

No 73 81.11

Yes 17 18.89

Total 90 100

Table 4.5 distribution of respondent's access to credit Source own survey,2019

The table 4.7 shows that the fact that majority 73(81.11%) of sampled enterprise never obtain any kind of
credit from micro finance institution and only 17(18.89%) are get credit service.

4.7 The advantage of micro and small scale enterprise

the following table contributes unemployment reduction for sector and to increase and living standards of
micro and small scale business sector with in debre markos town.

Description respondents

frequency Percentage(%)

Advantage of micro and small

scale enterprise

25
Covering consumption 15 16.67

Improving living standard 45 50

Skill and knowledge 20 22.22

Continues monthly income 10 11.11

Total 90 100

Source own survey,2019

Table 4.6 distribution of respondent's contribution of micro and small enterprise

From the above table we can understand that covering consumption 15(16.67),improving living standard
45(50%),continues monthly income 10(11.11%),and skill and knowledge 20(22.22%).this shows that the
majority of contribution of micro and small scale enterprise sector are improving living standard at
45(50%).

4.8 Sources of capital

Item respondents

frequency Percentage(%)

Self financing 65 72.22

From NGO

From bank

Family 25 27.78

government

Total 90 100

Table 4.7 indicates the initial capital of the owners of small business are 65(72.22%) of the respondents
are their initial capital source are them selves. From total sampled owner 25(27.78%) of the respondent
are can gain initial capital from family. From this we can conclude most micro and small scale enterprise
owners initial finance source them selves and from family.

26
21

4.9 Micro and small scale enterprise contribution of unemployment reduction

The following table is an indicator to increase the current member of employee's micro and small scale
enterprise sector in Debre Markos town.

Description respondents

frequency Percentage(%)

Current member of employment

Less than 5 38 42.22

5-7 25 27.78

7-10 17 18.89

Above 10 10 11.11

Total 90 100

Source own survey,2019

Table 4.8 distribution of respondents by current employment

As shown in the above table the current member of enterprise for micro and small scale enterprise are less
than five 38(42.22%),25(27.78%) are between 5-7,17(18.89%) are between 7-10 and 10(11.11%) are
above 10. This implies that the current initial member of employment of enterprise as majority of the
respondent replied.

22

27
23

4.10 support from government

The following table explains support for micro and small scale enterprise from government are providing
training ,giving loans,providing production place and facilitating condition with Debre Markos town.

Description respondent

frequency Percentage(%)

Have you obtain training

Yes 63 70

No 27 30

Total 90 100

Source own survey,2019

Table 4.9 distribution of respondents training government

The above table shows that level of training from concerned government operate your business.
Accordingly, 63(70%) of the total sample replied that they got support from government training where
as,27(30%) replied no support of government to their micro and small scale enterprise sectors.

4.11 types of government support to micro and small scale enterprise

Questionnaire item respondents

frequency Percentage(%)

What types of support you get from

government

Managerial training

Credit service 6 6.67

By market linkage

Financial training 10 11.11

Technical training 74 82.22

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Total 90 100

Source own survey,2019

Table 4.10 types of government support to micro and small scale enterprise

The respondents reply that the government supports them by different way. That means 6(6.67%) of the
respondents in the business owners are gain the credit service, 10(11.11%) support by financial training
and from the respondents 74(82.22%) gain technical training. This shows that the majority of the
respondents gain technical training at74(82.22%).and implies that lacks of credit service from
government to micro and small scale enterprises.

4.12 Profitability of business/Growth rate

Questionnaire item respondents

frequency Percentage(%)

If your business show growth rate

Yes 64 71.11

No 16 17.78

Stagnant 10 11.11

not known

Total 90 100

4.11 profitability of business/growth rate Source own survey, 2019Table

The majority of business have growth rate. The table shows that 64(71%) of the respondents are respond
that their business have growth rate, 16(17.78%) are responds no growth of their business. And the other
10(11.11%) are respond at stagnant.

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4.13 Measurement of growth rate

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Questionnaire item respondents

frequency Percentage(%)

What is your measurement for

growth rate

Employment opportunities 8 8.89

Income generation 59 65.56

Opening new branch 23 25.56

Others

Total 90 100

Source own survey,2019

Table 4.12 measurement of growth rate

The above table shows that the majority of the respondents measure their business by income generation
at 59(65.56%), 23(25.56%)measure their growth rate by opening new branch and others measure by
employment opportunities 8(8.89%).

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 4.14 Attitude of unemployment person and society towards micro and small scale
enterprises

Questionnaire item respondents

frequency Percentage(%)

What is attitude of unemployment person

towards micro and small scale enterprises

Very good 7 7.78

Good 69 76.67

Poor 14 15.56

very poor

Total 90 100

What is attitude of society towards micro and

small scale enterprise

very good

Good 20 22.22

Poor 54 60

very poor 16 17.78

Total 90 100

Source own survey, 2019

Table 4.13 attitude of unemployment and society towards micro and small scale enterprise

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As shown in the above table the current attitude of unemployment persons the majority of the respondents
respond good at 69(76.67%),14(15.56%) of the respondents are poor and the other 7(7.78%) respond very
good. This implies that the majority of unemployment persons attitude towards micro and small scale
enterprise are good at 69(76.67%).

The attitude of society,20(22.22%) of the respondents responds good,54(60%) of the respondents are
responds poor, and other 16(17.78%) are responds very poor. This implies that the majority of the society
attitude are poor at 54(60%).

4.15 contribution of micro and small scale enterprises to solve unemployment

Questionnaire item respondent

frequency Percentage(%)

Micro and small scale enterprise have contribute to

solving unemployment?

Yes 73 81.11

No 17 18.89

Total 90 100

Source own survey,2019

Table 4.14 the contribution of micro and small scale enterprise solve unemployment

The above table shows that out of 90 respondents 73(81.11%) are say solve unemployment and the other
17(18.89%) are say micro and small scale enterprise is not solve unemployment problem. This implies
that micro and small scale enterprise can solve unemployment problem in Debre Markos town.

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CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATION

5.1 Introduction

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Under this chapter,based on the analysis of the data and major finding of the study,the following
conclusions major possible recommendation were forwarded.

5.2 conclusions
The importance of the micro and small scale enterprise sector is never to be lost weather in the past and at
the present, it holds the key to success in the economy to reduce unemployment micro and small scale
enterprise is the vital tools.

To this end the following important goings are obtained from collected questionnaires.

-The micro and small scale enterprises are contributed to the younger unemployment people by helping
financial,material and arrangement of market place(situation) to make work opportunity and self
support.

-The micro and small enterprise helps to the educated unemployed person to implement in accordance
with their similar educational skills.

-Family and self financing are the major source of micro and small scale enterprise initial capital.

-Financial problem is the main problem that influence the performance of of the respondents in Debre
Markos town.

-The majority of participants of micro and small scale enterprise sector are educated unemployed in
Debre Markos town.

-The majority of micro and small scale enterprise in Debre Markos town have growth rate.

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5.3 Recommendation
Based on the data collected and analyzed,the researcher forwarded the following key recommendations as
per to the questions and objective of the study.

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-Micro and small scale enterprise should improve lacks of budget for micro finance institution to
reduction unemployment.

-Micro and small scale enterprise sector should provide better benefit to its unemployment reduction to
increase income and living standard in the micro and small enterprise in better and adequate manner.

-micro and small scale enterprises are the second largest area of employment generating sectors. So that
the government should recognize this and most facilities the marketing of their private and give some
initiative to encourage those running self business and this may reduce unemployment.

-The government should change the attitude of society to know the benefit of micro and small scale
enterprise in unemployment reduction.

-Micro and small scale enterprise should participate females like to increase their self confidence.

-To reduce unemployment the government,banks,NGOs should to work on cooperatively giving

managerial training,by provide credit services, supervise and give support for micro and small scale
enterprises must reduce unemployment

-the government should create market linkage and give managerial training to micro and small scale
enterprise owners

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REFERENCES

- Yinge Alemu(1993),Amhara Regional micro and small scale enterprise development strategy,Bahirdar.

- Assefa Besufekad(1997),report on the urban unemployment service the ANRS,vol,1,Bhirdar.

-Ethiopian journal of economy vol,14(1),(2005).

-MOTI Minter of trade and industry “micro and small scale enterprise development strategy of
Ethiopia”,addisababa Ethiopia No,11 shambhughatch(2010)”micro small and medium enterprise in India
appraisal.

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- IMF (2013)”translating economic growth in to higher living standard inclusive growth in Ethiopia.

-Jeff Bloem(2014) Micro, Small, Medium Scale enterprise destinationcillogepraners world wide.

-Venden Burge (2006) “poverty Reduction through Small enterprise “International labor Paul office
Geneva one.A(2006)”Small and Medium saize En.

-Azoam (2013) “Determines of Business Success of small and medium enterprise” International journals
of Business and social science vol.no.20.

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