Impediments to Microenterprise Development in Bahir Dar City, North-Western Ethiopia

Abstract

Persistent unemployment and worsening poverty have become serious concerns in Ethiopia, particularly
in urban areas. In response to this state of worsening poverty and unemployment, the country has
been implementing microenterprise development program as a strategy to generate massive employment
opportunities. The purpose of this article is to examine practical challenges and problems faced
in implementing the program in Amhara National Regional State with particular reference to Bahir Dar
city. To this effect, in-depth interview and focus group discussion along with document analysis were
used to generate qualitative data pertaining to the day to day operations of the program. Participants in
the interview and group discussions were selected using purposive sampling method considering their
experience and knowledge about the program, and the data were analysed qualitatively. The findings
reveal that microenterprises encountered a range of administrative and resource constraints including
lack of credit, working premise and access to market. Most importantly, lack of experience and
knowledge in running joint businesses and excessive dependence on government support were found
formidable challenges emanating from the side of target beneficiaries. This paper shows that microenterprises
provide temporary livelihood opportunities to the unemployed youth with likelihood of generating
sustainable employment although limited in scope. Finally, the study recommends that a more
sustainable approach to employment creation and poverty reduction would be directing resources to the
promotion of large-scale industrial enterprises that could create sustainable employment opportunities.