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Trade and Industry Bureau Addis Ababa. Micro and Small Enterprises Development Achievements in Addis Ababa. June 2005. Definition : The working definition of MSE in Ethiopia is based on capital.

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slide1

Trade and Industry Bureau

Addis Ababa

Micro and Small Enterprises Development Achievements in Addis Ababa

June 2005

slide2

Definition: The working definition of MSE

  • in Ethiopia is based on capital.

1.1Micro Enterprises:- are those business enterprises with a paid up capital of not exceeding Birr 20,000 (about $ 2326), and excluding high tech consultancy firms and other high-tech establishments.

1.2Small Enterprises: are those business enterprises with a paid up capital above Birr 20,000 and not exceeding Birr 500,000 (about $ 58,140), and excluding high-tech consultancy firms and other high-tech establishments.

slide3

No.

Industrial Group

Number of Establishments

Persons Engaged

1

Informal sector operators

127,318

167,404

2

Handicraft/Cottage Industries

47,848

72,308

3

Small Scale Manufacturing Industries

3,836

11,369

Total

179,002

251,081

2. Size of MSE’s in Addis Ababa

slide4

No.

Sub-Sector

No. Of Enterprises based on capital (in birr)

Total No. of

Enterprises

Sub. Sector Share in %

<=5,000

5,001

to 20,000

20,001

to 200,000

>=200,001

1.

Whole Sale

876

1,129

1,317

503

3,825

4.2

2.

Retail

26 404

11 228

3,001

537

41,170

45.2

3.

Service

13,107

14 132

13 820

1686

42 745

46.9

4.

Industry

535

991

872

593

2,991

3.3

5

Agriculture

72

169

69

18

328

.4

Total

40 994

27 649

19,079

3,337

91,059

100

Percentage

45

30.4

20.9

3.7

100

3. Licensed Enterprises in Addis Ababa .

SourceT&IDB,2004 eth.c

slide5

TThe size of the sector:-

-        - 68 643 (75.4%) are Micro enterprises.

-        - 19, 079 (20.9%) are small enterprises

-       -   3,337 (3.7%) are small including medium & large Enterprise

TThe size of the sub-sectors

-        - Retail & service Enterprises = 83,915 (92.1%)

-        - Whole sale, Agriculture, Industry = 7 144 (7.9%)

TThe whole Business is Dominated by MSE’s = 87 722 (96.3%)

slide6

4 Constraints Facing the sector

Based on the rapid assessment survey conducted (1995 Ethc.) in 11,000 enterprises in the city the main constraints identified were:-

-Lack of working space for production and marketing.

-Shortage of credit and finance

-Regulatory problems (licensing, organizing, illegal

Business etc.)

-Poor production techniques.

-In put access constraints

-Lack of Information

-Inadequate management and Business skill

-Absence of appropriate strategy

slide7

5. Selected Sub-sectors for Intervention

-Textile and Garment

-Food Processing

-Wood & Metal Works

-Construction

-Municipal Activities

slide8

6. Reasons for selection

-Large market size for their product

-Employment observation capacity

-Short period of return over Investment

-High role for poverty reduction

slide9

7 Target Groups

-TVET graduates from different fields of studies.

-Poor and un employed women.

-Street vendors

-MSE operators under high risk

-Disabled people with different skills.

-All Enterprises in the selected sub sectors

slide10

8. Achievements

8.1 Preparation of Business plans for 3 sub-sectors namely:

–    Textile and garment

–    Food Processing

–    Wood & Metal Works

8.2 Different types of Income generating projects implemented

- Kiosk shops - Urban agriculture

- Eat fruit Tents - Car wash

- Sunday markets - Mobile kitchen

- Leather crafts - Compost etc.

8.3 The urban land leasing is made to address the problem

of working and marketing space for MSE’s.

8.4 All extension Agents were trained in different business

skills with the help & support of G.T.Z, Femseda and

the Bureau.

slide11

8.5 Restructuring of the Bureau

  • –Trade and Industry development Bureau is restructured focusing on MSE promotion Thus:
  • –The Bureau has two deputy heads one for the MSE promotion and the other for Business licensing, Registration & Promotion.
  • –MSE promotion is made to include
    • The Enterprise Development Department.
    • Marketing Department
    • Co-operative Department
    • Urban agriculture Department
  • –The sub city Trade & Industry Office is made to manage:
    • MSE team
    • Cooperative team
    • Urban Agriculture team
    • Trade & Industry Registration & licensing team.
  • –The Kebele MSE Office handles the one stop service center and the extension Agents (usually 5 in each kebele)
slide12

Restructuring …

  • 8.6 The BDS service is introduced and implemented.
  • 8.7Addis credit and saving share company’s policy is improved to include more service product and increase its out reach.
  • 8.8 All the micro Financing institutions in the city (seven of them) are organized to have a proper Networking. They have prepared a proposal for the City Government, produced a common poster for promotion and their Brochures are distributed to all kebeles of the city.
  • 8.9 MSE councils and committees are established to help in the promotion of MSE.
    • –MSE councils at the city level, sub- city & kebele.
    • –MSE committee from the Advisory council of the city government.
slide13

Restructuring …

8.10 All the kebeles in the city are made to provide one stop service to all MSE operators and to the New interies focusing on:-

–Provision of premises for production and sales.

–Technical and managerial training for the operators.

–Marketing.

–Provision of Business Development Services.

–Provision of appropriate Technology

–Provision of credit.

–Provision of Information

–Licensing and legalization of Businesses.

slide14

9. Stakeholders working in the promotion of MSE

The Bureau (MSE Sector) was clothly working with:-

9.1 Government offices & Bureaus

9.2 Micro Financing Institutions – In the provision of loan

9.3 TVET’s - skill test, skill gap training

9.4 Productivity improvement center (PIC) – Training, skill test, prototype development, research etc..

9.5 NGO’s (MSE-Forum, GTZ, Plan Ethiopia, wise, concern etc.) Training& Marketing Promotion.

9.6 MSE councils – At City, Sub – City, and Kebele level Advisory and promotional support.

9.7 MSE committee of the Advisory council of the City Government – Advisory support.

9.8 Project support unit-(EU-Fund) – in Training fund support.

9.9 Private Enterprises, NGO’s and Government Work shops – in the production of looms for weavers handcrafts for Dry wast collection, etc.

slide19

10.12 Problems encountered

  • Lack of skilled man power at the sub-city level.
  • Low level of awairness of MSE’s as an area of job creation in general .
  • Low interest for Trainings, workshops on the part of operators.
  • Lack of managerial skills of operators
  • Individual request for plots of land