Socio-economic Contributions of Micro and Small Enterprises

The Case of Jimma City

Abstract

This study examined micro and small enterprises (MSEs) contributions to the socio- economic of peoples in Jimma city. The study used inferential and descriptive design, and was carried out on 82 organized/cooperated MSEs in Jimma city. Samples were randomly selected through stratification in each activity of the sector. Results were analyzed and changed to tables, charts and bar-graphs, , and some of them were tested using Chi-square techniques. The findings of the study has shown that there is a socio-economic improvement through participating in employment creation, saving and income generation, developing entrepreneur’s skills and knowledge, and gender empowering, changing many peoples’ social issues and also ways of acquiring businesses and linking different levels of enterprises to facilitate its development. Result indicates that 79.27% of the enterprises responded that the overall socio-economic improvement of the peoples was good. Even though the MSEs have such great roles in changing peoples’ living conditions, the activities of the sector was constrained by many factors like lack of financial capacity, lack of working and production places, rules and regulatory procedures, lack of capacity to compete larger enterprises, and insufficiency of business development services and socio- economic infrastructures. Though, there are strategies to combat problems in the city, these challenges also leads to importance to put some suggestions for the improvement of the enterprises activities. In this case enabling environment f for MSEs sector development is very crucial, especially, to encourage and promote the sector and there should be an integrated effort of government to lead the support, the need to participate private sectors and non-governmental organizations in the MSEs development.