Access to Market and Growth of Micro and Small Scale Enterprises in Ethiopia: Evidence from Wolaita and Dawro Zones, Southern Ethiopia

Abstract

Today in many developing countries like Ethiopia, micro and small scale enterprises (MSE) coupled with institutional supports such as good market access, grant a useful strategy to create jobs for jobless and reduce poverty. Access to market for the products of these MSE claimed to be the way and motivational factor in determining the achievement of the above stated goal. However, empirical evidence about access to market for the products of MSE are lacking and, if any, with so many challenges. Considering the case of access to market for products of MSEs in Wolaita and Dawro zones from Southern Ethiopia, this paper investigates whether there is good market access for their products to be revitalized as ensuring job creation and poverty reduction in the two zones. The study was based on primary data collected from 182 MSE operators selected from a total 7 districts (towns) of the two zones. The data was analyzed using descriptive statistics and probit regression model. Informed by relevant statistical tests, empirical model estimation was made using maximum likelihood estimation technique. The result shows the significant impact of access to credit, access to market information, experience in business, number of business development training attended, distance from the center of the market, age of the enterprise and the type of enterprise, on access to market reaffirming their role in promoting MSE development for income poverty reduction and employment creation in the two zones. Further strengthening and expanding access to market for MSE's product is commendable in this case as MSEs need to be given special attention and support for their growth and development.