Search results

The effectiveness of any government interventions to support small firms is always a concern in achieving improvements in enterprise performances. The purpose of this paper is to evaluate thoroughly the impact of micro and small enterprises’ (MSEs’) support programs on core intermediate and final outcomes of interest.

The impact evaluation employs a non-parametric matching procedure for parametric outcome analysis using the propensity score matching (PSM) method. Aiming at a doubly robust evaluation process, the study applies parametric analyses than non-parametric permutation-based tests to investigate the causal effects of the public intervention.

The study reveals that the public intervention encouraged MSEs to develop innovative business practices and improve their human capital development process. Moreover, the intervention had a positive effect in expanding employment opportunities in urban areas. Contrariwise, the study shows that support beneficiaries are not at an advantage in investment intensity. The lower level of investment intensity on fixed capital resulted inefficiency among the recipients. Moreover, the intervention did not have an effect on changing the net-asset over time for the recipients.

This study implies that the support programs need to be dynamic and also targets on creating innovative high-growth MSEs.

This paper is fairly original and provides policy makers and MSE promoters/facilitators evidence-based information on the effectiveness of the support services, with looking at firm-level analysis.

With the objective of trying to understand and assess the status of delivering business development services (BDS) and identifying the constraints, the Ethiopian Development Research Institute conducted a survey of randomly selected 974 MSEs (551 micro and 423 small enterprise operators) in 2003.

Random, anonymous survey of MSE operators in BDS in Ethiopia.

The results of the survey indicated that there were very limited BDS providers in the sector, which delivered limited services to few MSE operators (very low outreach). MSE operators had very limited vocational and technical training (before starting business), received few short‐term training, extension and counselling, and marketing services. The most important constraints were mainly related to access to markets and finance. Networks or associations in the MSE sector were not used as useful instruments to promote joint marketing. The results of the survey reveal that there is not significant difference based on size (micro and small) and gender in accessing BDS in the MSE sector. Addressing the constraints of delivering BDS requires clarity regarding the roles of facilitator and providers and the use of subsidies during the transition phase. The interventions should focus on delivering BDS on sustainable basis by responding to the needs in the market and providing incentives to the BDS providers, particularly the private sector.

Very few systematic studies of this nature have been carried out in developing countries. The paper offers clear implications for policymakers involved in economic development and poverty reduction.

The purpose of this paper is to identify the proportion of farmers with constrained and unconstrained participation in the agricultural credit market and estimate the parameters that determine agricultural credit market participation in Finoteselam town, Ethiopia.

The study followed cross‐sectional study design where primary data were collected from 210 households through a questionnaire survey in Finoteselam town, north western Ethiopia. A combination of purposive and random sampling techniques was employed. Descriptive statistics were used to identify the proportion of farmers with different levels of participation in the agricultural credit market. The bivariate probit model was estimated to identify the parameters that determine smallholder credit market participation.

The study revealed that 48 percent of smallholder farmers are constrained non‐participating (i.e. rationed out) from the agricultural credit market due to lack of access to the service, 44.8 percent of them are constrained participating, 2.4 percent unconstrained participating and 4.8 percent of them are unconstrained non‐participating. Estimation results of the bivariate probit model indicated that variables such as high dependency burden, large landholding size, household's labor endowment, participation in off‐farm employment activities and incurring unforeseen expenses increased the probability of households to participate in agricultural credit markets. On the other hand, village dummy variable, old age of household head and borrowing from other sources decreased the probability of households participating in the agricultural credit market.

The findings raise policy concerns to devise a mechanism for creating a functioning rural insurance market, improve the labor market for encouraging off‐farm employment activities, devise wealth‐creating schemes and address the credit need of those smallholder farmers who are still rationed out from the agricultural credit market.

Little has been done on the subject of agricultural credit market participation in Ethiopia. Hence, this research will add to the thin literature on the subject.