MICRO AND SMALL ENTERPRISES' ROLES AND LIMITATIONS FOR JOB CREATION: In Guraghe zone of Sodo Woreda

Abstract Nowadays, Unemployment and low income are one of the present situations in urban cities of Ethiopia. The government of Ethiopia has formulated a policy to mitigate the overwhelmed problem by fostering micro and small enterprises. However, no study has been conducted on the contribution and limitations of enterprises to job creation in the study area. Thus, the central objective of this study was to explore the role of MSEs in tackling unemployment and their limitations in Guruge zone Sodo woreda of Buee and Kella towns. Descriptive research method was used and the study towns and sample enterprises were selected by using purposive sampling. To select sample respondent simple random sampling was used. To this end, 154 enterprises members from 31 enterprises and 3 WEO experts were participated. As a primary data, semi-structured questionnaires, FGDs and personal observations used and as a secondary data relevant written information from the WFEDO were used to enhance the reliability of the study. For data analysis, descriptive statistical tools like frequency distribution, tables and percentages were used. The study reveals 94.8% of participants of the study were unemployed before coming to MSEs. The data obtained from WFEDO indicates the job creation rate of enterprises for three consequent years 2017, in 2018 and in 2019 was 36.35%, 43.6% and 41.92%. However, although it has a significant contribution in reducing unemployment, all the study participants agree on the idea enterprises does not create job opportunities at the desired level. When looking at average monthly income of members, 38.7% of members get below 1,000 birr, 14.5% of members get between 100 1500 and 46.7% of members’ monthly average income was 1,500 birr. Besides, MSEs face different problems from start-up to operation time. Of these problems, adequate skill training, credit access for Expansion, production and market place and market linkages are the major one. To conclude MSEs have played significant role in creating employment opportunity in the study area. 85.7% of youths got employment access through MSEs. But, provision of adequate credit access, capacity-building training to improve business management capacity, facilitating production place, creating market linkage and Provision of information on market opportunities need attention.