Abstract:
The micro and small business sector is recognized as an essential component of economic development and a
crucial element in the effort to lift countries out of poverty (Wolfenson, 2007). External and internal factors are
known to affect the growth of MSEs. Thus, this review provides overview of challenges, prospects and factors
affecting growth of Micro and Small Scale Enterprises (MSEs). “Google Scholar” and “Science direct” search
engines/databases were used to conduct the review using search keywords ‘’the challenges of MSEs’’, ‘’the
achievements of MSEs’’ and, “factors affecting MSEs growth’’. The 16 articles collected show that The
prominent challenges listed in various studies in Ethiopia are access to finance, selling at less price compared
with other similar enterprises, shortage of raw material, lack of experience in own business, limited access to
markets, to premise, lack of training, cultural oppressions, high competition as a result of open entry to the
business, development strategy and policy focusses on agriculture which in turn discourage MSEs operating in
other sectors, unattractive market, lack of advertisement, training. shortage of electricity and unscheduled power
cuts, bureaucratic working procedure, high tax, high collateral requirement, high interest rate, lack of technology,
weak performance leading to absence of growth thinking challenges, starting business without conducting survey,
inappropriate tenure, uncollectible receivables, lack of financial management skill and Youth’s adverse attitude
towards working under umbrella of MSEs agency. On the opportunity side, studies revealed few of them
including business consultation services, training for the beginners, loan facilities, moral or encouragement,
peace and security, area specific features, support and reward like training, fund, and certificate play a role for
expansion and growth of women entrepreneurs in particular and MSE owners in general.
