Entrepreneurship and SMEs in Ethiopia: Evaluating the role, prospects and problems faced by women in this emergent sector

This paper attempts to identify the problem areas and developmental issues attached to women's entrepreneurship related to small medium enterprises (SMEs) particularly in Addis Ababa, the capital city of Ethiopia. It also attempts to devise certain stratagems for ensuring women's entrepreneurial growth and SMEs' advancement in the region.

The study was conducted in two phases. The first phase attempted to identify the problem areas in terms of nature, needs, desire, motivations and problems of women entrepreneurs in Ethiopia by an extensive review of the existing literature. The second phase incorporated a ground survey and focused interviews with groups of female entrepreneurs for assessing the factors related to entrepreneurship. The data pertaining to these issues were collected using 90 personally administered “schedules” in eight areas in Addis Ababa on the basis of stratified sampling. Basic level statistical analysis was performed using SPSS statistical package.

The focused interview identified problems in the areas of securing finances for establishing and running SMEs, lack of entrepreneurial and management competence and exposure, problems in finding the markets and distribution networks; limited opportunities for promotion and participation; limited amount of government and institutional support; absence of technological know‐how and integration mechanism; and rampant corruption in an undisguised or disguised form, as major bottlenecks.

The paper is one of the important studies taken in the context of women entrepreneurship in Ethiopia. No such studies have been undertaken in the past that assess the women entrepreneur in the context of overall SME development. Only a few exist but give more importance to microfinance and micro‐enterprises. So the paper is original in context as well as in research terms. Proper attention to the issues raised and recommendations made could give a significant boost to entrepreneurial activities in the region.