THE DEVELOPMENT CHALLENGES OF MICRO AND SMALL-SCALE MANUFACTURING ENTERPRISES IN ARBAMINCH CITY ADMINISTRATION, IN THE CASE OF SHECHA SUB-CITY, SOUTHERN ETHIOPIA

Abstract

This study was conducted to determine factors affecting the development of micro and small-scale manufacturing enterprises in Shecha sub city of Arbaminch town administration. Data were collected from 154 operators of MSEs. The data were analyzed using descriptive statics. lack of land/lack of operating or working space, lack of access to markets, lack of entrepreneurship skills and expertise, lack of equipment to carry out businesses and lack of credit for start-up capital or expanding are identified as the main factors affecting the development of micro and small scale manufacturing enterprises in the study area. The study result indicated that, most of MSEs have registered increase in employment and increase in total capital or assets during the entire duration of their business. Similarly, most of MSEs failed to formulate and adopt deliberate business development strategies. Sex, education status and source of skill to start business are found internal factor and association with level of enterprise development. So that, providing adequate working and marketing premise, provision of capacity building trainings on business development, management, marketing skills to owners and targeted action to control the import of cheap counterfeits must be made. Furthermore, measures need to be taken to promote the consumption of domestic goods so as to build a tradition of consuming Ethiopian-made products and thus expand the market for local articles, equipment and the provision “lease financing” should be strengthened.