The Role of Micro and Small Enterprise in Reducing Poverty in Dimtu Town: The Case of Nedi Gibe District, in Jimma Zone, Oromia Region, Ethiopia

Abstract

This study was conducted in Nedi Gibe district Jimma zone. The main objective of this study was to assess the role of micro and small enterprise in reducing poverty in urban area. The study was employed mixed research design. Micro and Small Enterprises (MSEs) have significant role to job creating, generating income, and poverty reduction. However, the performance of MSEs in Dimtu town is low. So, this study was done to investigate the determinants of MSEs Performance in Dimtu town using descriptive statistics. Both primary and secondary data were also employed in getting the necessary information for the analysis of the study. A total of 223 sample respondents were identified using Simple random sampling technique. The result of the study shows that the majority of the MSEs have been a recent establishment and faced challenges of inadequate startup capital, government policies and regulation related factors, limited infrastructure, corruption, lack of training, limited access to finance, poverty, attitude of work, cultural back ground and lack technology. Furthermore, the study also noted that most of the operators were found to be young labor force of male operators with educational qualification of high school or less. The finding supports that insufficient start up, low women participation, unfair distribution of infrastructure, low follow up negative attitude on MSEs Affect the performance of MSEs. Therefore the government official, local administration and all stake holders should have do on these problems.