An Assessment on the Role of Micro and Small Enterprises on Economic Empowerment of Women: a Survey of Women Operated Manufacture Enterprises the Case of Mekelle City, Tigray
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Mekelle University
Institute of Environment, Gender and Development Studies
Department of Gender and Development studies
A Research Proposal On
An Assessment on the role of micro and small enterprises on economic empowerment of women: a Survey of Women operated Enterprises the case of Mekelle city, Tigray
In Partial fulfillment of the requirements for obtaining the Masters Degree in Gender and Development Studies
1. Introduction
There are different ways of defining the term small and micro enterprises in different countries. The base for defining is depends on the number of employees hired, the capital invested and the total balance sheet (asset, liability and capital). So, according to European Union, small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover and/or annual balance sheet total does not exceed EURO 10 million. A micro enterprise is defined as an enterprise which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed EURO 2 million (Kayanula et al., 2000). SMEs do not have a universal acceptable definition. A definition of MSEs in the developed world will differ from the third world. An enterprise categorized as micro enterprise in USA may be treated as medium enterprise in Africa for the fact that the definition of MSE is relative to economic development.
Recognizing the significance of this sector as a key factor for rapid economic development, the Government of Ethiopia had issued Micro and Small Enterprises Strategy (FDRE, MoTI, 1997). Besides, the Growth and Transformation Plan (GTP) of Ethiopia has envisaged the promotion of micro and small enterprises as an important tool of poverty reduction (FDRE, MoFED, 2010).
Countries define micro and small enterprises using different criteria. In Ethiopia, the MSE sector is categorized into industrial and service sub-sectors. The former subsector comprises of manufacturing, mining, and construction subsectors while the service sector includes the retail trade, transport, hotel and tourism, information technology and repairs (FDRE, MoFED. 2010). In the industrial sector, a business enterprise which employs 6-30 five labor force, including business owner and family labor, and/or the monetary value of the enterprise’s total asset ranging from Birr 100001-15000001 is considered as small enterprise, and any enterprise with less than 6 employees and/or up to Birr 100,000 capital investment in total assets is considered as micro enterprise. In the service sector a business enterprise is considered as a small enterprise if it employs 6-30 five labor force, including business owner and family labor, and/or if the monetary value of the enterprise’s total asset ranges Birr 50001-500000. A service enterprise below 6 labor force and/or capital up to Birr 50,000 is classified as a micro enterprise. (Mekelle City MSEs Agency, 2014)
Empowerment of women means equipping women to be economically independent, self-reliant to have a position of self-esteem to enable them face, any difficult situation and to be able to participate in development activities and in the process of decision making. Women’s empower ent can be well paying strategy for overall economic and social development (Shugfta & Gangaiah, 2011).
Empowerment of women shows the empowerment of a society and economically stable and empowered women is blessing for her family, society and the nation. Economic empowerment of women is a famous phenomenon which is capturing the attention of researchers from all over the world. Economic empowerment is the basic right of women which strengthen her position in society and enables her to get equal status as their men counter parts.
Women’s economic empowerment is a prerequisite for sustainable development, pro-poor growth & the achievement of all the MDGs. At the same time it is about rights & equitable societies (Imrab, S & A. Sajid, 2013).
1.1 Background
In developing countries, microenterprises are the major source of employment and income generate for the urban population. For instance, nationwide expansion of microenterprises had been the major concern of the government in Ethiopia. As the data from statistical agency in 2004 in urbans small and micro business consisted of 584,911 micro enterprises that gave employment to 730,969 people. Another survey by CSA in 1999 showed that the urban small and micro business employment has increased to 1.15 million comprising about 50.6 percent of the 2.88 million total urban employments. According to a survey, Over 89% of the small and micro business sectors operators are also concentrated in manufacturing, trade, hotel and restaurant activities. The small scale manufacturing industries 85% are engaged in the manufacture of food, fabricated metal furniture. The government then recognizes the significance of this sector and shows its dedication to promote the MSEs development by the Issuance of National Micro and Small Enterprises Strategy in 1997 and the Establishment of the Federal Micro and Small Enterprises Development Agency. Thus, enterprises are launched to facilitate economic growth, bring equitable development, create long term jobs, provide base for medium and micro enterprises and promote export. Ethiopia’s industrial development strategy issued in 2003 also singled out the promotion of MSEs development as one of the important instruments to create productive and dynamic private sector. The promotion of this sector is justified on the grounds that enhancing growth with equity, creating long-term jobs, providing the basis for medium and large enterprise and promoting exports etc. The strategy puts a means to support the MSEs in terms of, infrastructure, financial facilities, supply of raw materials, and training (Ageba and Ameha, 2004). Special attention was given to the small and micro enterprises since 2004/2005. These sectors are showing a promising achievement towards the economic development especially to youth employment creation.
The micro and small enterprises contribute to the reduction of poverty and vulnerability of poor through enabling them to break the vicious cycle of poverty and also enabling them to enhance self empowerment, respect and social dignity. It allows poor people to increase their income, accumulate assets, and enter into mainstream society. MSEs also play key roles in a society including contributing to jobs through innovations and creativity as well as aiding human resources development. The role of MSEs on poverty reduction and women empowerment through diversifying their income alternative schemes is credible understand market linkage and take significant policy and government support (Mebrahtu, 2014).
SMEs play a crucial role towards achieving industrial & economic development objectives of an economy. SMEs are playing an increasing important role in sustaining economic growth and generating employment ( Muriungi, 2012).
In Tigray region, before 2013 a lot has been done to eradicate poverty and unemployment in wider context by expanding the micro and small enterprises. Thus, the enterprises have grown before 2013 81,413 to 137,080 in 2013/14 and number of people engage in MSEs increase from 137,251 to 198,499. When come to the study area Mekelle city the Micro and small enterprises categories in to five sectors. Those are manufacture, construction, urban agriculture, trade and service 1,567 (8.5%) enterprises are engage in construction, in manufacture 3373 (18.45%), in urban agriculture 2,338(12.79%), in Trade, 4,215(23.05) &, 6,792(37.15%) are engage in service. this data shows majority of enterprises are engage in service and the less number in construction even categorized by sex female enterprises are mostly engage in service By supporting and strengthening the micro and small enterprises, it is able to create permanent and temporary job opportunities for 52,981 citizens from this female 22,592 . Among the supports given to these enterprises are: production and market places are given for 5,100 enterprises, a total of 96.4 million birr credit is also given for 6,410 enterprises, and 28,042 members of different small enterprises are given trainings on business administration, on skills and techniques and other related issues. In relation to market, 12,634 enterprises are connected with housing development agency. In general, these enterprises have contributed in creating job opportunities and in economic development (Mekelle city MSEs Agency, 2014).
In Tigray, there are around 137,080 MSEs as of 2014. In Mekelle, there are 15,556 MSEs formal and informal sectors as of 2014. Majority of the MSEs that exist in Tigray and Mekelle are owned by female. This accounts around 52% mostly engage in trade, service and urban agriculture and 52% and 55% of the MSEs in Tigray and Mekelle respectively. The total number of employees is mostly dominated by family labour, which is 81.1% and hire employees reach 18.7%. The major constraints facing MSEs are finance credit, lack of working place, market problem, lack of managerial skill and Technology etc. even though MSEs can be major job provider in developing countries and developed countries, still unemployment level is high in Ethiopia as compared to developing countries and also in Tigray region and study area Mekelle (Mekelle city MSEs Agency ,2014).
1.2 Statement of the Problem
The development of MSEs is becoming a very critical issue for unemployed people, especially for women. Women business-owners claim access to finance as one of their bigger challenges. In Sub-Saharan Africa, about 45 percent of women-owned enterprises are denied credit. An International Labor Organization (ILO) survey conducted in 2005 indicated that 30.5 percent of women entrepreneurs have lack of access to working capital in Ethiopia. Women-owned enterprises remain small partly due to women’s reliance on their own limited resources or borrowing from family and friends. Further compounding this challenge is the fact that 15.6 percent of women entrepreneurs lack management skills, preventing their ability to obtain credit? In Ethiopia, women entrepreneurs’ inability to grow their firms and access credit poses compounded by the country’s patriarchal culture. Such deeply embedded social norms have historically influenced women’s lower levels of education, less experience in the workforce, and reduced knowledge of technical and managerial skill. On the other hand, start-up and growth capital is needed to overcome these deficits. Women entrepreneurs that do approach banks find that they cannot meet the credit application conditions that banks require, especially regarding the provision of loan guarantees and collateral. From the financial institution side, there is a lack of effective risk-sharing mechanisms that can unlock liquidity, particularly important in countries with strict financial sector regulations.( Heather kipnIs, 2013). In most of developing countries there are social and cultural barriers Women have been often under estimate for their abilities as they are risk averter less confident, having less social contacts and dependable. There are socio-cultural barriers which impede the contribution of women towards their personal and community development. These barriers include feminine role to born children, home making, and subordination before husband due to superiority dominance of males. Such barriers lead towards disempowerment (Shoheen & Sajid, 2013). So, even the Tigray region and the study area Mekelle city have the same problem on women economical disempowerment and other social and cultural problems. Therefore, this study will assess the contribution of micro and small enterprises to empower women economically and to identify the factors affect on women economically development and this study also assess on the challenges of MSEs women economical empower in Mekelle city. In light of this, the study attempts to answer the following basic questions:
Research questions • What is the contribution of micro and small enterprise on economic empowerment of women? • What are the characteristics of MSEs on economic empowerment of women? • What are the factors affect economic empowerment of women in MSEs? • What is the economical status of women pros and cons MSEs? • What is the trend of women economy from starting in MSEs? • What is the Challenges of Women engage to manufacture sector of MSEs?
1.3 Objective
1.3.1 General Objective
The study aims to analyze the role of micro and small enterprises in the economic empowerment of women in the study area.
1.3.2 Specific Objectives
The following Specific objectives are outlined: • To identifying factors affecting economic empowerment women in MSEs • To examine the characteristics of micro and small enterprises on economical empowerment of women. • To determine the economical status of women participating pros and cons MSEs. • To evaluate the trend of women economy on the involvement of MSEs. • To examine the challenges of women engage in manufacture sector of MSEs. • Forward possible recommendations that would help enhance best practices and ameliorate major factors facing the MSEs and the women economic empowerment
1.4 Significant of the Study
Most of Ethiopian women economy is low by different cases even in Tigray Region. This problem is common in developing countries. Currently, the government of Ethiopia gave attention to the promotion and development of MSEs, especially for women as a strategy for poverty reduction and on employment creation. The issuance of the first national MSE Development and Promotion Strategy in 1997 and formulation of Women Policy in 1998 aims to empower women by facilitating conditions to have access to resources and to participate in economic activities. Designed different support programs to help women get out of poverty and build the capacity of women entrepreneurs by providing access to credit, training, and related assistances. However still there is additional work .So, This study will be valuable in assessing the of role of MSEs on economical empowerment of women; the study will contribute to the possible insights for policy makers and use it as data for upcoming researchers and other base line concerned bodies.
1.5 Scope and limitation
The study covers only one sector of MSEs Service from each sample of sub-cities of Mekelle City. In this research the samples is take from the MSEs with register capital less than 1.5 million. Other sector is beyond the scope of the study because of time and finance constraints. Secondly, respondents may show a tendency of underestimating their income and capital; this is because they fear tax and other relating problems. Finally, although data are lacking on micro and small enterprises in Mekelle city.
1.6 Organization of the Paper
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The research has five chapters. The first chapter is introduction; which includes statement of the problem, objectives, methodology, significance of the study, scope and limitation of the study and also hypothesis of the study. Literature review is second chapter and the third chapter deals with brief description of the study area and research methodology. Result obtain are discuses in chapter four and finally chapter five presents the conclusion and recommendation of the study.
3. Methodology and Materials
3.1 Description of the Study Area
The study will be conduct in Mekelle city, Mekelle is a city in the northern Tigray Region of Ethiopia and capital city of Tigray. It is located around 780 kilometers north of the capital Addis Ababa, at a latitude and longitude of 13°29′N 39°28′E with an elevation of 2084 meters above sea level. The city is divided in to seven sub-cities. Number of population is estimated to be 215, 914, consisting of 104,925 are men and 110,989 women. (CSA, 2007).
Fig.1 Location Map of Tigray and Ethiopia
Fig. 2 Location Map of Mekelle City
3.2 Research Method and Procedures
3.2.1 Data type and Source
The research will have both qualitative and quantitative types of data. Concerning source of data, both primary and secondary sources will be use in generating valuable and relevant data.
Primary source: primary data will be collected through field work survey. Information on the status of the economy of women will be collected from the Owners of MSEs and employees. The researcher will use semi-structure interview and structure questionnaire.
Secondary source: secondary data will be collected from Trade and Industry office (MSEs core process) and officially published and unpublished materials, reports, statistical bulletins, brochures and other material will be use for other necessary information
3.2.2 Study Design
3.2.2.1 Sampling
3.2.2.1.1 Sample frame
Micro and small enterprises in urban area of Mekelle city is purposely selected to be the study area; because of the city is highly populate area, has un exploit potential that definitely serves as business area for MSEs, particularly MSEs focusing on the Business. Secondly, the research focus area of Mekelle University for its immediate support through research and community services outreaches.
3.2.2.1.2 Sample Size Determination
There are several approaches to determine the sample size these include using a census for small populations, formula to calculate a sample size. In order to determine the require sample size at 95% confidence level, degree of variability of = 0.5 and with the level of precision of = 9% is N=n n= sample size N = number of population 1+N(e2)
Where n is sample size, N is the population size and ‘e’ is the level of precision. According to the above formula, the sample size will be a minimum of 240. And this research paper survey to 240 respondents.
3.2.2.1.3 Sampling Techniques and sample Size
The first stage is purposively selection of 3 sub-cities from seven sub-cities of Mekelle city, Hadnet, Ayder and Hawelti are select purposefully because these are the major areas in the city having well functioning MSEs. The second stage is the total 180 sample is allocated to each sub-cities proportionately on the basis of the available number of MSEs. Total of 180 women MSEs and 24 employee simple random sampling for the participant sample operators is sample from 240 the list obtain from Trade and Industry Office selecting use of systematic random sampling, representative women.
3.2.3 Data collection and Instruments
In this research the primary data collection instrument is semi structured for the interviews and structured for questionnaires. In order to collect the require data from select sample, the researcher use the survey method.
The designs of the questionnaire will be close and open ended types of questions. The structured questionnaire is translated to Tigrigna and back to English to maintain its consistency. Pre-test will be taking 10 owners of MSE 4 employees of MSEs are select randomly sampling, which is not included on this study. Based on the pre-test findings, the instrument is revising, edit and modify if unclear or confusing questions are found. Data collectors and supervisors are trained for one day on the objective of the study, contents, consistence and logical order of the questionnaire and how to maintain confidentiality and privacy of the participants. The collected data will be checked by supervisors and the researcher on daily basis. When incompleteness and inconsistence occurs, data collectors will go back to respondent’s to refill the questionnaire.
In-depth interviews are conducted by taking 4 samples from owners of MSE and 3 from the employees of MSEs. These sample respondents are selected using simple random sampling.
3.2.4 Variables of the study
Dependent Variable is economic women in MSEs and Independent Variables are different factors affect to Micro and Small enterprise.
3.2.5 Data Processing and Analysis
After data collection is complete, data entry, cleaning, and analysis will be done by using SPSS version 16 program. In order to describe the summary statistic in relation to variables, frequency and percent is calculate to determine the association between the dependent and independent variables using statistical analysis: chi-square and odds ratio will be calculate, the statistical analysis, in order to determine the association, if p value is less than 0.05, it is consider as statically significant.
3.2.6 Model Specification
The economic empowerment of women depend on the Socio-demography characteristics like Age, Religion, and family size, marital status, educational background, occupation and work load of the home etc.
ϒ = β0+ β1X1- β2 X2+ β3 X3- β4 X4+ β5 X5-β6 X6 +µ
ϒ = is the economics of women in MSEs (dependent variable) β0= is the constant term βˈs = are regression coefficients to be estimate
Xˈs R = are explanatory variables that determine the economy of women in MSEs µ = is stochastic error term
In this study, therefore, the logit model is customize by the equation in order to analysis how various factors affect the economics of women in MSEs.
4. Budget
The research requires approximate 16,000 Ethiopian Birr and the budget is planned to be obtained from governments and non governments organizations.
|No. |Item/ Activities |Quantity |No. of days |Daily Estimate Cost (in |Total cost (in |Remark |
| | | | |Birr) |birr) | |
|1 |Communication | |30 |10 |300 | |
|2 |Transport | |30 |20 |600 | |
|3 |Per diem for data collectors |4 |5 |200 |4000 | |
|4 |Per diem of supervisor |1 |1 |300 |300 | |
|5 |Per diem of supervisor during Training |1 |5 |300 |1500 | |
|6 |Per diem of data collectors during training |5 |1 |200 |1000 | |
|7 |Daily per diem for researcher |1 |60 |200 |12000 | |
|8 |Stationery materials | | | |1000 | |
| |Total | | | |15,300.00 | |
5. Time Schedule
The research will be conducted within 7 months starting from October until June, 2015 and the time table is indicated as follows.
|No. |
REFERENCE
Bereket T. (2010). The Role of Micro and Small Enterprises in Employment Creation and Income Generation , A Survey Study of Mekelle City, Tigray Region, Ethiopia Master’s Thesis in Mekelle University. Retrieved on Dec. 24, 2014. From http://opendocs.ids.ac.uk/opendocs/handle/123456789/5150 FDRoE (2013). Survey on Micro and Small Enterprises (MSEs) in Selected Major Cities of Ethiopia Retrieved 18th of Dec., 2014 from http://www.mwud.gov.et/c/document_library/get_file?uuid=28a0fa5f-8689-4828- 9244-7187413fb248&groupId=10136 Imrab S. & A.Sajid, (2013). Role of Microenterprises With Regard to Economic Empowerment of Women International Journal of Management Sciences and Business Research, 2013, Vol-2, Issue 8. Retrieved 15th of Dec., 2014 from http://www.ijmsbr.com/Volume%202,%20Issue%208%20Paper%20%287%29.pdf Mekelle City MSEs Agency, (2014). Census Statistical Data of 2014. From Mekelle city micro and small enterprises office V.Shugufta, Dr.B.Gangaiah, (2014). Women Empowerment Through Micro-Enterprises – A Study Of Y.S.R District, A.P. IOSR Journal Of Humanities And Social Science (IOSR-JHSS) Volume 19, Issue 2, Ver. III (Feb. 2014), PP 39-48 Retrieved 16th of Dec., 2014 Zemenu A. & Mohammed M, (2014). Determinants of Growth of Micro and Small Enterprises in ETHIOPIA (A Case of MSEs in Mekelle City, Tigray). Vol. 2, Issue 6, 2014 Retrieved on Dec. 24, 2014. From http://www.ijarcsms.com/docs/paper/volume2/issue6/V2I6-0042.pdf
