Assessments of growth of micro and small enterprises (MSEs): A review of empirical evidence from Ethiopia

Global based growth and transformation through the promotion of micro and small enterprises (MSEs) has been robustly underscored in various development plans in Ethiopia, but both the levels of unemployment and quality of jobs remain a concern. The main objective of this study was to review related literature of the Determinants of growth of micro and small enterprise, identify the gap based on the review of the literatures and finally concluding and recommending based on the reviewed papers. The findings of the study reveal that MSEs suffer from a host of internal problems (e.g., Weak human resources and other assets) and external factors, including lack of access to credit, limited market facilities, policy and regulatory bottlenecks. For small enterprises, access to credit appears to be a binding constraint for their growth as they are “too big” for micro financial institutions, but they are “too small” for formal banks in terms of the size of loan, reflecting the “missing middle financial intermediaries” that serve small enterprises. Hence, without a renewed focus on promoting firm growth, especially MSEs through improving access to warehouses, relaxing credit constraints, and improving the macroeconomic and regulatory environment, the potential for MSEs for creating more jobs will be severely compromised.