Determinants of Micro and Small enterprises’ effectiveness in Urban employment creation in Debre Birhan town, ethiopia

Abstract

Although the role of Micro and Small Enterprises (MSEs) in employment creation is important, many challenges are adversely affecting their contribution. This study was focused on assessing the determinants of MSEs' effectiveness in employment creation at Debre Birhan town, Ethiopia. The study used a cross sectional research design. The collected data from 406 survey questionnaires were analyzed through binary logistic regression. The result shows that the majority 231(56.9%) of MSEs were ineffective in employment creation. The result of binary logistic regression analysis revealed that MSEs which experienced politico-legal, infrastructural, marketing and financial challenges were 4.866 times (AOR=4.866; 95%CI:2.389, 9.910), 1.958 times (AOR=1.958; 95%CI:1.029, 3.725), 4.265 times (AOR=4.265; 95%CI:1.729, 10.525) and   2.569 times (AOR=2.569; 95%CI:1.527,4.321) more likely ineffective in employment creation. To sum up, the finding revealed that politico-legal, marketing, financial and infrastructural challenges had positive[BT1]  contribution to MSEs' ineffectiveness in employment creation. Accordingly, the study recommended that government bodies shall invest their resources in addressing politico-legal, marketing, financial and infrastructural challenges; while if their resource is too limited by giving priority from first to last.