IDEAS home Printed from https://ideas.repec.org/a/spr/joiaen/v11y2022i1d10.1186_s13731-022-00221-8.html
   My bibliography  Save this article

The role of micro, small and medium enterprises (MSMEs) to the sustainable development of sub-Saharan Africa and its challenges: a systematic review of evidence from Ethiopia

Author

Listed:
  • Ebrahim Endris

    (Woldia University)

  • Andualem Kassegn

    (Woldia University)

Abstract

Micro, small and medium-sized enterprises (MSMEs) have a potential impact on achieving many of the sustainable development goals much greater than their size. This review aimed to investigate existing literature on the contribution of MSMEs to the sustainable development of Ethiopia and its challenges. The review provides a comprehensive and systematic summary of evidence and provides future research directions. A systematic review methodology was adopted through reviewing the available literature comprehensively including research articles, policy documents, and reports over the period 2011–2021 from ScienceDirect, Google Scholar, ECONBIZ, IJSTOR, EBSCO, Web of Science, and Scopus databases. A search on these databases and grey literature returned 1270 articles; 87 papers were included in this review following screening of aticles using pre-determined criteria. The paper found that MSMEs significantly contributed to the sustainable development goals of Ethiopia through creating employment, alleviating poverty, and improving their living standards. However, the review has identified access to finance, access to electricity, and trade regulation are the major constraints for the development of the sector. The review outlines key policy implications to develop a comprehensive policy that alleviates the existing challenges of the sector and calls for further MSMEs impact evaluation research.

Suggested Citation

  • Ebrahim Endris & Andualem Kassegn, 2022. "The role of micro, small and medium enterprises (MSMEs) to the sustainable development of sub-Saharan Africa and its challenges: a systematic review of evidence from Ethiopia," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-18, December.
  • Handle: RePEc:spr:joiaen:v:11:y:2022:i:1:d:10.1186_s13731-022-00221-8
    DOI: 10.1186/s13731-022-00221-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s13731-022-00221-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1186/s13731-022-00221-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carlsson, Fredrik & Demeke, Eyoual & Martinsson, Peter & Tesemma, Tewodros, 2020. "Cost of power outages for manufacturing firms in Ethiopia: A stated preference study," Energy Economics, Elsevier, vol. 88(C).
    2. Haroon Bhorat & Morné Oosthuizen, 2020. "Jobs, Economic Growth, and Capacity Development for Youth in Africa," Working Papers 202005, University of Cape Town, Development Policy Research Unit.
    3. O’Raye Dicta Ogisi & Toritseju Begho, 2021. "Covid 19: Ramifications for progress towards the sustainable development goals (SDGs) in Nigeria," International Review of Applied Economics, Taylor & Francis Journals, vol. 35(2), pages 256-268, March.
    4. Tasssew Woldehanna & Wolday Amha & Manex B. Yonis, 2018. "Correlates of business survival: empirical evidence on youth-owned micro and small enterprises in Urban Ethiopia," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-26, December.
    5. Yao Wang, 2016. "What are the biggest obstacles to growth of SMEs in developing countries? – An empirical evidence from an enterprise survey," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 16(3), pages 167-176, September.
    6. Sam Jones & John Page & Abebe Shimeles & Finn Tarp & John Page & Måns Söderbom, 2015. "Is Small Beautiful? Small Enterprise, Aid and Employment in Africa," African Development Review, African Development Bank, vol. 27(S1), pages 44-55, October.
    7. Abdisa, Lamessa T., 2018. "Power outages, economic cost, and firm performance: Evidence from Ethiopia," Utilities Policy, Elsevier, vol. 53(C), pages 111-120.
    8. Esther K. Ishengoma, 2018. "Entrepreneur Attributes and Formalization of Micro, Small and Medium Enterprises in Tanzania," Journal of African Business, Taylor & Francis Journals, vol. 19(4), pages 491-511, October.
    9. Sniazhana Sniazhko, 2019. "Uncertainty in decision-making: A review of the international business literature," Cogent Business & Management, Taylor & Francis Journals, vol. 6(1), pages 1650692-165, January.
    10. Lamessa Tariku ABDISA, 2018. "Power Outages, its Economic Cost and Firm Performance: Evidence from Ethiopia," Departmental Working Papers 2018-01, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    11. Yue Li & Martín Rama, 2015. "Firm Dynamics, Productivity Growth, and Job Creation in Developing Countries: The Role of Micro- and Small Enterprises," The World Bank Research Observer, World Bank, vol. 30(1), pages 3-38.
    12. Refiloe G Khoase & Krishna K Govender, 2013. "Enhancing small, medium and micro enterprise development: Exploring selective interventions by the Lesotho government," Development Southern Africa, Taylor & Francis Journals, vol. 30(4-5), pages 596-615, December.
    13. Justin Doran & Nóirín McCarthy & Marie O’Connor, 2018. "The role of entrepreneurship in stimulating economic growth in developed and developing countries," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1442093-144, January.
    14. Nordhagen, Stella & Igbeka, Uduak & Rowlands, Hannah & Shine, Ritta Sabbas & Heneghan, Emily & Tench, Jonathan, 2021. "COVID-19 and small enterprises in the food supply chain: Early impacts and implications for longer-term food system resilience in low- and middle-income countries," World Development, Elsevier, vol. 141(C).
    15. Brixiová, Zuzana & Kangoye, Thierry & Yogo, Thierry Urbain, 2020. "Access to finance among small and medium-sized enterprises and job creation in Africa," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 177-189.
    16. Mano, Yukichi & Iddrisu, Alhassan & Yoshino, Yutaka & Sonobe, Tetsushi, 2012. "How Can Micro and Small Enterprises in Sub-Saharan Africa Become More Productive? The Impacts of Experimental Basic Managerial Training," World Development, Elsevier, vol. 40(3), pages 458-468.
    17. Alessandro Liberati & Douglas G Altman & Jennifer Tetzlaff & Cynthia Mulrow & Peter C Gøtzsche & John P A Ioannidis & Mike Clarke & P J Devereaux & Jos Kleijnen & David Moher, 2009. "The PRISMA Statement for Reporting Systematic Reviews and Meta-Analyses of Studies That Evaluate Health Care Interventions: Explanation and Elaboration," PLOS Medicine, Public Library of Science, vol. 6(7), pages 1-28, July.
    18. Eshetu, T. & Ketema, Mengistu & Ketema, B., 2013. "Economic Impact of Support Service Program on Micro and Small Enterprises: The Case of Dire Dawa Administration, Ethiopia," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 5(1), pages 1-9, March.
    19. Rajagopal, 2014. "The Human Factors," Palgrave Macmillan Books, in: Architecting Enterprise, chapter 9, pages 225-249, Palgrave Macmillan.
    20. Gemechu Ayana Aga & Barry Reilly, 2011. "Access to credit and informality among micro and small enterprises in Ethiopia," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(3), pages 313-329.
    21. Yuhuan Jin & Sheng Zhang, 2019. "Credit Rationing in Small and Micro Enterprises: A Theoretical Analysis," Sustainability, MDPI, vol. 11(5), pages 1-15, March.
    22. Flora Wang, 2016. "What are the biggest obstacles to growth of SMEs in developing countries? - A picture emerging from an enterprise survey," Working Papers IES 2016/09, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2016.
    23. Amankwah-Amoah, Joseph & Osabutey, Ellis L.C. & Egbetokun, Abiodun, 2018. "Contemporary challenges and opportunities of doing business in Africa: The emerging roles and effects of technologies," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 171-174.
    24. Beck, Thorsten & Cull, Robert, 2014. "SME finance in Africa," Policy Research Working Paper Series 7018, The World Bank.
    25. Mike Herrington & Alicia Coduras, 2019. "The national entrepreneurship framework conditions in sub-Saharan Africa: a comparative study of GEM data/National Expert Surveys for South Africa, Angola, Mozambique and Madagascar," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-24, December.
    26. Grace Ofori-Abebrese & Samuel Tawiah Baidoo & Ebenezer Essiam, 2020. "Estimating the effects of financial inclusion on welfare in sub-Saharan Africa," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1839164-183, January.
    27. Hai Guo & Zhuen Yang & Ran Huang & Anqi Guo, 2020. "The digitalization and public crisis responses of small and medium enterprises: Implications from a COVID-19 survey," Frontiers of Business Research in China, Springer, vol. 14(1), pages 1-25, December.
    28. Haroon Bhorat & Morné Oosthuizen, 2020. "Working Paper 336 - Jobs, Economic Growth, and Capacity Development for Youth in Africa," Working Paper Series 2462, African Development Bank.
    29. Corti Paul Lakuma & Robert Marty & Fred Muhumuza, 2019. "Financial inclusion and micro, small, and medium enterprises (MSMEs) growth in Uganda," Journal of Innovation and Entrepreneurship, Springer, vol. 8(1), pages 1-20, December.
    30. Thorsten Beck & Robert Cull, 2014. "Editor's choice SME Finance in Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 23(5), pages 583-613.
    31. Diao, Xinshen & Kweka, Josaphat & McMillan, Margaret, 2018. "Small firms, structural change and labor productivity growth in Africa: Evidence from Tanzania," World Development, Elsevier, vol. 105(C), pages 400-415.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fuad Beshir, 2022. "The ongoing political crises and their impact on micro and small enterprises: a case study of Ethiopia," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 4(3), pages 48-60, September.
    2. Dr. S. Nafeesa & Dr. Hema Joe, 2024. "Effectiveness of green entrepreneurship practices in driving the growth of Indian small and medium-sized enterprises," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 15(1), pages 01-09, January.
    3. Ebrahim Endris & Andualem Kassegn, 2023. "Profitability of Agricultural Micro and Small-Scale Enterprise in North Wollo Zone, Amhara Regional State, Ethiopia," SAGE Open, , vol. 13(2), pages 21582440231, May.
    4. Risman, Asep & Ali, Anees Janee & Soelton, Mochamad & Siswanti, Indra, 2022. "The behavioral finance of MSMEs in the advancement of financial inclusion and financial technology (fintech)," MPRA Paper 118212, University Library of Munich, Germany, revised 10 Feb 2023.
    5. Zimi Thibane & Lelethu Mdoda & Lungile Gidi & Anele Mayekiso, 2023. "Assessing the Venturing of Rural and Peri-Urban Youth into Micro- and Small-Sized Agricultural Enterprises in the Eastern Cape Province, South Africa," Sustainability, MDPI, vol. 15(21), pages 1-18, October.
    6. Wang, Zankai & Le, Thanh Tiep, 2022. "The COVID-19 pandemic’s effects on SMEs and travel agencies: The critical role of corporate social responsibility," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 46-58.
    7. Thomas Neumann, 2023. "Are greener start-ups of superior quality? The impact of environmental orientation on innovativeness, growth orientation, and international orientation," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-24, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mohammad Abir Shahid Chowdhury & Shuai Chuanmin & Marcela Sokolová & ABM Munibur Rahman & Ahsan Akbar & Zahid Ali & Muhammad Usman, 2021. "Unveiling the Nexus between Access to Electricity, Firm Size and SME’s Performance in Bangladesh: New Evidence Using PSM," Energies, MDPI, vol. 14(20), pages 1-16, October.
    2. Fabiane Tubino Garcia & Carla Schwengber ten Caten & Elaine Aparecida Regiani de Campos & Aline Marian Callegaro & Diego Augusto de Jesus Pacheco, 2022. "Mortality Risk Factors in Micro and Small Businesses: Systematic Literature Review and Research Agenda," Sustainability, MDPI, vol. 14(5), pages 1-37, February.
    3. Majid Hashemi & Glenn Jenkins, 2021. "The Economic Benefits of Mitigating the Risk of Unplanned Power Outages," Working Paper 1468, Economics Department, Queen's University.
    4. Muhammad Luqman & Mirajul Haq & Iftikhar Ahmad, 2021. "Power Outages and Technical Efficiency of Manufacturing Firms: Evidence from Selected South Asian Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 133-140.
    5. Edeh, Jude N. & Acedo, Francisco J., 2021. "External supports, innovation efforts and productivity: Estimation of a CDM model for small firms in developing countries," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    6. Acar, Pinar & Berk, Istemi, 2022. "Power infrastructure quality and industrial performance: A panel data analysis on OECD manufacturing sectors," Energy, Elsevier, vol. 239(PC).
    7. Fuzhong Chen & Haifeng Li & Huini Wei & Wani Nelson, 2022. "The Ownership, Innovation, and Sustainable Development of Micro and Small Enterprises: Evidence of China," SAGE Open, , vol. 12(4), pages 21582440221, November.
    8. Solomon, Edna Maeyen & van Klyton, Aaron, 2020. "The impact of digital technology usage on economic growth in Africa," Utilities Policy, Elsevier, vol. 67(C).
    9. Hashemi, Majid & Jenkins, Glenn, 2022. "Can privatization of distribution substations improve electricity reliability for non-residential customers? An application to Nepal," Utilities Policy, Elsevier, vol. 74(C).
    10. Adu-Gyamfi, Richard & Kuada, John & Asongu, Simplice, 2018. "An Integrative Framework for Entrepreneurship Research in Africa," MPRA Paper 89133, University Library of Munich, Germany.
    11. Saibal Ghosh, 2022. "Firm Performance and Productivity: Is Labour an Obstacle?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(3), pages 709-728, September.
    12. Muhammad Arif & Mudassar Hasan & Ahmed Shafique Joyo & Christopher Gan & Sazali Abidin, 2020. "Formal Finance Usage and Innovative SMEs: Evidence from ASEAN Countries," JRFM, MDPI, vol. 13(10), pages 1-19, September.
    13. Guo, Dongmei & Li, Qin & Liu, Peng & Shi, Xunpeng & Yu, Jian, 2023. "Power shortage and firm performance: Evidence from a Chinese city power shortage index," Energy Economics, Elsevier, vol. 119(C).
    14. Meron Tesfamichael & Edson Twinomujuni & Mbeo Ogeya & Silver Ssebagala & Yacob Mulugetta, 2022. "Barriers to the institutionalization of industrial energy efficiency in Africa: A case study from Uganda," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 11(3), May.
    15. Charles Ackah & Richard Osei Bofah & Derek Asuman, 2017. "Who Are Africa’S Entrepreneurs? Comparative Evidence From Ghana And Uganda," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 22(04), pages 1-23, December.
    16. Timothy Ayomitunde Aderemi & Adedayo Mathias Opele & Johnson Ifeanyi Okoh & Mamdouh Abdulaziz Saleh Al‐Faryan, 2023. "An econometric analysis of small‐ and medium‐scale enterprises and employment creation in Nigeria," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1624-1633, April.
    17. Jing Gu & Junyao Wang & Yang Yang & Zeshui Xu, 2019. "Credit Line Models for Supply Chain Enterprises with Channel Background and Soft Information," Sustainability, MDPI, vol. 11(10), pages 1-20, May.
    18. Yilong An & Yinghua Zhang, 2021. "Crossing the Valley of Death for SMEs: Management Practices From China," SAGE Open, , vol. 11(3), pages 21582440211, September.
    19. Binalfew Tsehay & Mekbeb Afework, 2020. "Precancerous lesions of the cervix and its determinants among Ethiopian women: Systematic review and meta-analysis," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-16, October.
    20. Frank Ranganai Matenda & Mabutho Sibanda, 2022. "Determinants of Default Probability for Audited and Unaudited SMEs under Stressed Conditions in Zimbabwe," Economies, MDPI, vol. 10(11), pages 1-28, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joiaen:v:11:y:2022:i:1:d:10.1186_s13731-022-00221-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.