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    Class 4

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    SAMUALE ASSEFA MEKURIYA
    The document summarizes information about micro and small enterprises (MSEs) in Ethiopia. It begins by stating that MSEs play an important role in both developed and developing economies, including Ethiopia, where they occupy a prominent position in economic development by generating employment, equitable income distribution, and stimulating competition. It then provides previous definitions of MSEs in Ethiopia based on capital and number of employees. Microenterprises are defined as having a total capital of less than 50,000 Birr for services or 100,000 Birr for industry, employing 5 or fewer workers. Small enterprises have capital between 50,001-500,000 Birr for services or 100,001-1,500,000 Birr for other

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    Class 4

    Uploaded by

    SAMUALE ASSEFA MEKURIYA
    20 views7 pages
    The document summarizes information about micro and small enterprises (MSEs) in Ethiopia. It begins by stating that MSEs play an important role in both developed and developing economies, including Ethiopia, where they occupy a prominent position in economic development by generating employment, equitable income distribution, and stimulating competition. It then provides previous definitions of MSEs in Ethiopia based on capital and number of employees. Microenterprises are defined as having a total capital of less than 50,000 Birr for services or 100,000 Birr for industry, employing 5 or fewer workers. Small enterprises have capital between 50,001-500,000 Birr for services or 100,001-1,500,000 Birr for other

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    The document summarizes information about micro and small enterprises (MSEs) in Ethiopia. It begins by stating that MSEs play an important role in both developed and developing economies, including Ethiopia, where they occupy a prominent position in economic development by generating employment, equitable income distribution, and stimulating competition. It then provides previous definitions of MSEs in Ethiopia based on capital and number of employees. Microenterprises are defined as having a total capital of less than 50,000 Birr for services or 100,000 Birr for industry, employing 5 or fewer workers. Small enterprises have capital between 50,001-500,000 Birr for services or 100,001-1,500,000 Birr for other

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views7 pages

    Class 4

    Uploaded by

    SAMUALE ASSEFA MEKURIYA
    The document summarizes information about micro and small enterprises (MSEs) in Ethiopia. It begins by stating that MSEs play an important role in both developed and developing economies, including Ethiopia, where they occupy a prominent position in economic development by generating employment, equitable income distribution, and stimulating competition. It then provides previous definitions of MSEs in Ethiopia based on capital and number of employees. Microenterprises are defined as having a total capital of less than 50,000 Birr for services or 100,000 Birr for industry, employing 5 or fewer workers. Small enterprises have capital between 50,001-500,000 Birr for services or 100,001-1,500,000 Birr for other

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 7

    DAMAT Hotel and Business College

    Course Tittle: Entrepreneurship and Employability skills


    Department: Marketing

    1 August 30,2014 E.C


    Micro and Small Enterprises in Ethiopia
    3.1. Facts of Micro and Small Enterprises in Ethiopia
    Small and medium enterprises (SMEs) cover a wider range of industries and
    play an important role in both developed and developing economies.
    …..Ethiopia is no exception and SMEs occupy a prominent position in the
    development of the Ethiopian economy… MSEs are the natural home of
    Entrepreneurship. ..!!! The sector is also an important force to stimulate
    economic development by:

     Generate employment , Equitable income distribution , Activate competition

     Exploit niche markets , Enhance productivity and technical change

    2
    The government‘s recent industrial development strategy identifies
    MSEs as key priority. Enterprises in the MSE sector are defined both
    in terms of paid up capital (asset) and number of employees.

    3
    3.2. Previous Definition of Enterprises in Ethiopia:
    This definition of MSMEs is provided in the Federal Urban Job
    Creation and Food Security Agency establishment regulation No
    374/2016.
     Micro enterprises: means an enterprise having a total capital, excluding
    building, not exceeding Birr 50,000 in the service sector or not exceeding
    Birr 100,000 in the industrial sector and engages 5 workers, including the
    owner, his family member and other employees.
     Small enterprises: means an enterprise having a total capital, excluding
    building, from Birr 50,001 to Birr 500,000 in the case of service sector or
    Birr 100,001 to Birr 1,500.000 in the case of urban agriculture, artisanal
    mining and construction sector engages from 6 to 30 workers including the
    owner, his family members and other employees.
    4

     Small manufacturing industry is an industry with total

    capital, excluding building, from Br. 100,001 to Br. 1,500,000


    with 6 to 30 workers
     Medium manufacturing industry is an industry with total

    capital, excluding building from Br. 1,500,001 to Br. 20,000,000


    engaging from 31 to 100 workers

    There are two main approaches to define MSEs. These are:


    o By some measure of Size/Quantitative Approach
    o Using an economic/Control definition/ Qualitative Approach
    5
     By some measure of Size/Quantitative Approach : Size refers to

    the scale of operations. Some criteria are applicable to all industrial


    areas, while others are relevant only to certain types of business.

    Examples of Criteria used to measure size/ Quantitative Approach are:


     Number of employees is the most widely used criteria because it is
    inflation proof, transparent, comparable, and available ,
     The best criteria in any case depends up on the user‘s ,
     Volume/value of sales turnover ,
     Asset size , Insurance in force, Volume of deposits, Total capital
    investment ,

    6
    7

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