Micro and Small Enterprises Development Achievements in Addis Ababa

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

  1.1   Micro 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.   1.2   Small
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.
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2. Size of MSEs in Addis Ababa  
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3. Licensed Enterprises in Addis Ababa .  
SourceTIDB,2004 eth.c
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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 MSEs 87 722 (96.3)
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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
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5. Selected Sub-sectors for Intervention
-         Textile and Garment -         Food
Processing -         Wood Metal Works -        
Construction -         Municipal Activities
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6. Reasons for selection
-         Large market size for their
product -         Employment observation
capacity -         Short period of return over
Investment -         High role for poverty
reduction
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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
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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 MSEs. 8.4 All
extension Agents were trained in different
business skills with the help support
of G.T.Z, Femseda and the Bureau.
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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)

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Restructuring
8.6 The BDS service is introduced and
implemented. 8.7 Addis credit and saving share
companys 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.
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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.
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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 TVETs - skill test, skill gap
training 9.4 Productivity improvement center
(PIC) Training, skill test, prototype
development, research etc.. 9.5 NGOs
(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, NGOs and
Government Work shops in the production of
looms for weavers handcrafts for Dry wast
collection, etc.
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10.1 Metal Wood Works Clusters
No. Sub-city Number of Sites Number of Blockst Total Area (m2) Capacity/ person Remarks
1 Gullele 5 69 47,884 3,980 Clusters are functioning
2 Yeka 3 108 53,000 6,500 gtgt
3 Akaki-Kalitie 3 81 36,449 4,850 gtgt
4 Nefas Silk-Lafto 4 164 44,800 8,450 gtgt
5 Bole 2 100 40,000 6,580 gtgt
6 Lideta 2 35 28,500 2,100 gtgt
7 Kolife-Keraniyo 3 160 63,800 8,861 gtgt
8 Arada 2 76 45,000 4,560 gtgt
Total 24 793 359,433 45,891 gtgt
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10.3 Food Processing Clusters under
construction
No. Sub-city Number of Sites Number of Blocks Total Area (M2) Capacity/person Remarks
1 Gullele 40 4,800 1,000 Most blocks have been accomplished
2 Yeka 40 4,800 1,000 gtgt
3 Akaki-Kalitie 23 2,760 575 Under construction
4 Nefas Silk-lafto 70 8,400 1750 Construction has been accomplished
5 Bole 16 1,920 400 Under construction
6 Lideta 16 1,920 400 Mostblocks have been accomplished ecept in one Kebele
7 Kolife-Keraniyo 34 4,080 850 Under construction
8 Arada 20 2,400 500 gtgt
9 Addis Ketema 30 3,600 750 Few blocks have been accomplished, the rest are under construction
10 Kirkos 23 2,760 575 Under construction
Total 312 37,440 7800
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10.5 Textile Garment Cluster Under
Construction
No. Sub-city Number of Sites Number of Blocks Total Area (M2) Capacity/person Remarks
1 Gullele 8 23 43,125 6,900 Under construction
2 Yeka 2 6 11,250 2,250 gtgt
3 Addis Ketema 2 4 7,500 1,500 gtgt
4 Arada 2 3 5,625 1,125 gtgt
5 Kirkos 1 4 7500 1500 gtgt
Total 15 40 75000 13275
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10.11 Promotional Support for MSES
Sept. 2003 - June 2005
No Activities Unit Budget Year Budget Year Budget Year Budget Year
No Activities Unit 2003/4 2004/5 2004/5 S
No Activities Unit Actual Plan Actual
1 Provision of Working Premises
1.1 Space Provided M2 222,299 770,500 977,777 1.200,076
1.2 Number of beneficiaries Person 37,554 217,641 93,298 130,852
2 Trainings and BDS gtgt 4,910 133,531 45,529 50,439
3 Market Linkage gtgt 1,322 52,800 30,662 31,984
4 Provision of Credit
4.1 Amount of Credit Millon/in birr 44 238 110 154
4.2 Number of beneficiaries Person 21,223 218,150 27,000 48,223
5 Private/ cooperative businesses gtgt 19,134 200,159 74,941 94,075
6 Created new job opportunities gtgt 45,351 113,670 107,283 152.,634
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10.12 Problems encountered

• Lack of skilled man power at the sub-city level.
• Low level of awairness of MSEs 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