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Business development services (bds) for micro and small enterprises (mses) (impact assessment on the case of mekelle city, tigray, ethiopia)

Author: 
Abebe E. Alemu, Seid Mohamedbirhan, Teshome Desta and Adem Mohammed
Subject Area: 
Social Sciences and Humanities
Abstract: 

MSEs are playing prominent role in the economies of developing countries like Ethiopia. For this reason, the Federal Government of Ethiopia as well as the authorities at different levels of the country have attempted to promote MSEs through offering Business Development Services (BDS). The objective of BDS is to improve MSEs’ performance. To this end, this study aims examining the contribution of BDS provided by various stakeholders in Mekelle City, Tigray, Ethiopia on the expansion and development of MSEs. Both qualitative and quantitative data were used in the study. The effect of BDS (particularly training) on the performance of MSEs were assessed in terms of its contribution to growth (current capital and the number of employees). BDS has brought changes in MSEs in terms of innovation which results in efficiency and profit improvement. The supply driven nature of the training may shade lights on the sustainability of training. The lack of willingness to pay for training implies dependency of the MSE owners which may affect the participation of the private sector in the training that in turn affects the continuity and the sustainability of the BDS services. Making the training demand driven may help fit to the interest of the MSE owner which in turn improves the satisfaction level of the trainees. Attitudinal change in avoiding dependency on government and NGO provision and make MSE owners interested in training and willing to pay for it. This will assure the sustainability and the continuity of the service and its contribution to business development.

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