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Determinants of the sustainability and growth of micro and small enterprises (MSEs) in Ethiopia: literature review

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  • Beza Muche Teka

    (Debre Markos University)

Abstract

The role of micro and small enterprises (MSEs) has been recognized in Ethiopia at the strategic and policy levels. They are considered as a way to create jobs, alleviate poverty, ensure food security, and promote private sector development. Despite several government programs and support schemes aimed at empowering MSEs to be more competitive and sustainable, they continue to fail at alarming rates. Previous studies revealed that the failure rate of MSEs in developing countries like Ethiopia is higher than in developed countries due to a variety of internal and external factors. Thus, the objective of this study was to identify the major factors that commonly affect the sustainability and growth of MSEs in Ethiopia through systematic literature review. In order to achieve the objective of the study; published previous research works (journal articles) in the manufacturing and service sector from 2006 to 2021 were used. The findings from different empirical studies revealed that financial factors, marketing factors, political-legal variables, lack of adequate infrastructure, technological factors and manager or owner personal characteristics are the major factors that commonly determine the sustainability and growth of MSEs in Ethiopia. Finally, the study suggested that government, non-governmental organizations (NGOs), and financial institutions should give great attention towards the sustainability and growth of MSEs in Ethiopia.

Suggested Citation

  • Beza Muche Teka, 2022. "Determinants of the sustainability and growth of micro and small enterprises (MSEs) in Ethiopia: literature review," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-16, December.
    • Handle: RePEc:spr:joiaen:v:11:y:2022:i:1:d:10.1186_s13731-022-00261-0
    DOI: 10.1186/s13731-022-00261-0
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    References listed on IDEAS

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    1. Gebrehiwot, Ageba & Wolday, Amha, 2006. "Micro and Small Enterprises (MSE) Development in Ethiopia: strategy, Regulatory Changes and Remaining Constraints," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 10(2), pages 103-103, April.
    2. Endalew Terefe Alene, 2020. "Determinants that influence the performance of women entrepreneurs in micro and small enterprises in Ethiopia," Journal of Innovation and Entrepreneurship, Springer, vol. 9(1), pages 1-20, December.
    3. Erstu Tarko Kassa, 2021. "Socioeconomic determinants of micro and small enterprise growth in North Wollo and Waghimira Zone selected towns," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-14, December.
    4. Hayelom Abrha Meressa, 2020. "Growth of micro and small scale enterprises and its driving factors: empirical evidence from entrepreneurs in emerging region of Ethiopia," Journal of Innovation and Entrepreneurship, Springer, vol. 9(1), pages 1-22, December.
    5. Irani Arráiz & Francisca Henríquez & Rodolfo Stucchi, 2013. "Supplier development programs and firm performance: evidence from Chile," Small Business Economics, Springer, vol. 41(1), pages 277-293, June.
    6. 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.
    7. Graham Hubbard, 2009. "Measuring organizational performance: beyond the triple bottom line," Business Strategy and the Environment, Wiley Blackwell, vol. 18(3), pages 177-191, March.
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    2. Catherine W. Gathitu & Dr David Kabata & Dr Grace Kiiru, 2024. "Influence of Government Sponsored Enterprise Funds-Credit Services on the Growth of Group-Based Micro and Small Enterprises in Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(2), pages 1326-1340, February.

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