Growth Potential and Business Constraints of Micro and Small Enterprises in South Wollo Zone, Amhara Region, Ethiopia

Ethiopian Economics Association (EEA)
Addisu Molla


In Micro and Small Enterprises (MSE) sector a thorough examination of
factors that constrain enterprises growth is critical to the survival and growth
of the enterprises. This paper, therefore, utilized the data collected on 224
MSEs in south Wollo zone of Amhara Region, Ethiopia to analyze the extent to
which the growth of MSEs is linked with the constraints. Three sets of models
were employed. The MSEs employment growth was significantly and
negatively affected by limited access to finance, limited access to business
services, and limited access to market. In addition, limited access to premises,
limited access to finance and limited access to business services were
significantly and negatively affect the operators’ perception on growth
potential of enterprises income. Therefore, the results highlight that the
growth of MSEs are highly influenced by accesses of productive resources and
assets. The analysis and findings, on the other hand, should help to
professionals in such field of study. On the other hand, it should help shed
some light for policy makers and anyone else who may have a stake on the
small business development as a positive knock on effect for growth of MSEs.