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Possible Questionnaires in Doing a Feasibility Study in Laundry Business by veg21665

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									Amhara National Regional State
Micro & Small Enterprise
Development Agency

A survey on Identification of problems faced
by Micro & Small Enterprises in ANRS




                       Prepared by:
                                   Waleligne Mamo
                            Facilitation & Promotion Department
                                               And
                                   Wendimu Terefe
                          Information & Consultancy Department
                       March 2002
                       Bahir Dar




                                1
ACKNOWLEDGMENT


First of all our deepest and sincerest thanks goes to Trade and Industry Departments of those
selected five zones, (North Shewa, South Wollo, North Gonder, East Gojjam and weast Gojjam)
for the enormous collaboration and the attention given us.


Our sincerely grateful goes to Amhara Development Association (ADA) for their participation
with their driver just when we were needy.


We are also grateful to Trade and Industry and plan and Economy Bureau who offered us
reference books to develop our survey.


Our big thanks goes to those MSEs operators who sacrificing their precious time we had chances
to work with.


Finally it is obvious the present work would be impossible with out different opinion, direct and
indirect participation of our admirable staffs (ReMSEDA)


Sincerely, because of their collaboration this survey has been possible, many thanks.




Wendimu Terefe & Waleligne Mamo




                                                 2
Contents
Part one: Introduction ------------------------------------------------------------------ 1
    1.1 Statements of problems ------------------------------------------------------            2
    1.2 Objective of the study ---------------------------------------------------------         2
    1.3 Significance of the study -----------------------------------------------------          2
    1.4 Scope and coverage -----------------------------------------------------------           2
    1.5 Methodology -------------------------------------------------------------------          2
    1.6 Definition of terms ------------------------------------------------------------ 3


Part two: General over view of MSEs in Amhara Region
        2.1 The role of MSEs in Amhara region---------------------------------- 4
        2.2 Existing situation of MSEs in Amhara Region --------------------- 4


Part Three: Analysis and Interpretation
      3.1    General information
        A. Level of education ------------------------------------------------------------ 6
        B. Sex -----------------------------------------------------------------------------     7
        C. Age ----------------------------------------------------------------------------- 7
        D. Number of families ----------------------------------------------------------- 7
        E. The year that the enterprise established ------------------------------------- 7
        F. Number of employees and number of families------------------------------ 8
        G. Responsibility of respondents ------------------------------------------------ 8
        H. Establisher of the enterprise --------------------------------------------------- 8


        3.2 Working condition of MSEs
        A.    Problems faced during the establishment of the enterprise ------------- 9




                                                        3
      B.    The source of initial capital ------------------------------------------------- 9
      C.    Favorable conditions to start the enterprise ------------------------          10
      D.     The instruments / tools that are using for Production/ services               10
      E.    Seasonality of the demand of the product / service --------------------- 11
      F.    Profitability of the enterprises ---------------------------------------       11
      G.     Advertisement --------------------------------------------------------        12
      H.     Quality of the product or service -----------------------------------         12
      I.    Information ------------------------------------------------------------       13
      J.    Willingness to be a member of cooperative-------------------------             13
      K.    Training -----------------------------------------------------------------     14
      L.    Book of Account -------------------------------------- ------------            14


3.3 Problems which have been confronted by MSEs in business type /sector specific
       A.    Food & Beverage------------------------------------------- --------- 15
       B.    Textile ---------------------------------------------------------------- 15
       C.    Wood work------------------------------------------------------------ 16
       D.    Service trade --------------------------------------------------------- 16
       E.    Whole sale trade ----------------------------------------------------- 16
       F.    Retail trade ----------------------------------------------------------- 17
      G.     Other informal sectors ----------------------------------------------- 17




3.4 The level of problems which have been confronted by MSEs /Regional/
      A.     Lack of market-------------------------------------------------------- 18
      B.    Lack of finance/capital/ --------------------------------------------- 19
       C.    Problems related to government roles and regulation------------ 19
      D.     Lack of information and advice ----------------------------------- 20
       E.    Lack of sufficient training ------------------------------------------ 21
      F.    Lack of premises /working place----------------------------------- 21




                                                      4
     G.    Shortage of the supply of raw materials -------------------------- 22
     H.    Cultural influence --------------------------------------------------- 22
     I. Lack of infrastructure facilities ------------------------------------ 23
Part four: Conclusions and Recommendations
     4.1 Conclusions --------------------------------------------------------------------- 24
     4.2 Recommendations -------------------------------------------------------------- 26
Annex
     1. Table of findings /Table 1-30/
     2. List of abbreviations
     3. Questionnaires
     4. Bibliography




                                                    5
PART ONE

INTRODUCTION


In many developing countries there has been and still is, a strong move of the government to give
up or reduce its involvement in ventures that the market can take care of. Efforts are being made
by Ethiopian government through the implementation of promotional policies as never before for
the MSE sectors. Like government initiatives some NGOs merit special attention too.


More over, Amhara National regional state based on the proclamation No 42/1999 has formulated
a strategy for MSEs development in the region knowing the enormous importance that this sector
can bring for the society of the region in such as, create employment opportunity, bring rapid
economic growth, produce wide range of goods & services which are accessible and cheaper for
huge number of persons of the region.




                                               6
One of the initiatives of regional government is the establishment of an institution / ReMSEDA/
aimed to be engaged with the search out of the problems of MSEs and work towards their
improvements.


This paper is organized in five parts: The 1st, which, is this part is basically the introduction where
statements, significance, objective, scope and coverage, methodology and the definition applied in
the study are discussed. The 2nd part discusses the general over view of the MSEs where the role
and existing situation of MSEs in the region are discussed. In the 3rd part, results of findings are
analyzed and interpreted. The last part presents conclusions and recommendations.




1.1.Statements of problems: -
MSE operators have problems such as lack of finance, lack of market, lack of premises, lack of
infrastructure, etc in their business activities.


1.2.Objective of the study: -
The objective of this study is to find out the various problems of MSEs that are bottlenecks and
obstacles to start, expand and develop their business activities and recommend alternative
solutions.


1.3.Significance of the study: -
The significance of this study is to avail basic information‟s at regional level, for governmental
institutions and NGOs interested to work with MSE sectors.


1.4.Scope and coverage: -




                                                    7
The scope and coverage of the study includes business activities such as food and beverage, textile,
woodwork, service, wholesale, retail trade and informal sector      in North Gonder, South Wollo,
North Shewa, East Gojjam and West Gojjam existed in Amhara National Regional State.


1.5.Methodology:
The study has been done on two types of sampling techniques; first five zones were selected
among the 11 zones using non-probability sampling techniques. Secondly among the selected
zones each type of business and type of activities were selected using stratified probability
sampling procedure.


To collect the required data, the 387 randomly selected sets of MSE operators were all given
questionnaires to fill out. The investigators in the process of providing the required information
assisted some of the operators who were not able to write. In addition to the questionnaire, face-
to–face observation is also employed aimed primary at finding out their current status and future
goal, the problems involved and their targeted needs to meet this end.




1.6.Definition: -
We define MSE according to the proclamation No 42/1999 a proclamation to provide for the
establishment of Micro & Small Enterprises Development Agency (ReMSEDA) where it is
defined as: -


    '' Micro Enterprise‟‟ means commercial Enterprise whose capital is not exceeding birr
       20,000 other than technological and consultancy services.
    '' Small Enterprise'' means a business engaged in commercial activities whose capital is
       exceeding birr 20,000 and not exceeding 500,000 birr, other than high technological and
       consultancy service institutions.




                                                 8
PART TWO
GENERAL OVERVIEW OF MSES IN AMHARA REGION

2.1 . The role of MSEs in Amhara Region.
We are convinced that the MSE in ANRS play a crucial role in our economic improvement,
because they utilize relatively less capital, it‟s a home of entrepreneurship, can create substantial
job opportunity, utilize cheap and local raw materials, and produce goods and services. Which save
hard currency for the country in general and for our region in particular and the very important




                                                 9
point is that it is creating opportunities for the population to earn (generate) income, which by it
self create the way to reduce the poverty.


Comparing with large enterprises MSE maintain a closer relationship with its customers,
employees, it‟s based on lower overhead and have grater flexibility, because their size allows them
to adopt new processes, services, materials and products.


2.2 Existing situation of MSEs in Amhara Region /From ReMSEDA Strategy Booklet/


According to REMSEDA strategy booklet, in may 1997 (PP.5) the survey was done by the CSA
embraced towns like Gonder, Dessie, Bahir Dar and other urban areas of the region demonstrated
that 150,090 informal sector operators exist in our region which absorb 199,515 labor force. This
data represent 15.2 % of the total labor force engaged in the informal sector in the country. The
number of establishment in the region has the share of 10.24 % from the total establishment of
informal sector at the country level and 99.9% from industrial establishment of the region.




On the other hand, encouragement and promotional activities of MSE in the region have been
rather weak. Though the regional government has formulated the MSE regional strategy and put in
place institution to implement the strategy, little is achieved so far. MSEs are still facing sever
constraints in their activities and their promotion and development are, therefore, hampered. These
Micro and Small Enterprises are unable to address the problems they faced on their own, even in
and effectively functioning market economies. The problems / constraints/ relate to each other, to
the legal and regulatory environments, access to market, finance, business information, business
premises, the acquisition of skills and managerial expertise, access to appropriate technology,
access to infrastructure, and in some cases discriminatory regulator practices.


Since there have no been any organized policy and support systems that voter for the sector MSEs
have been confronted by the various problems which are of policy, structural and institutional in




                                                 10
nature, lack of smooth supply of raw materials and working premises were the major bottlenecks
for Micro & Small manufacturing industries to commence their activities. On the other hand
negative attitude of the public to the importance of the sector due to cultural influence is another
constraints to the development of MSEs, due to these reasons, training services to MSEs is fairly
young and weak. Only insufficient formal counseling, information and training services are given
and they are often given freely and are not demand driven and lack of know how on adequate skills
& experience.




PART Three

Analysis and Interpretation
This part presents the results of the survey that was conducted to find out those problems of MSE
operators that are bottlenecks and obstacles to start, expand and develop their business activities.


As shown in table one the study has attempted to cover representative samples of MSE operators
in seven business types in which the study has been conducted. Accordingly 27, 36, 5, 83, 12, 186,
and 38 MSE operators have been approached from food and beverage, textile, wood work, service,
whole sale, retail trade and informal sectors business types respectively. As pointed out in the first
part of this paper the study team employed two methods to gather data for the research, these were




                                                  11
questionnaire and observation. So the questionnaire distributed to the 387 MSE operators of the
seven business types and all were returned with complete responses.


3. 1- General Information


A. Level of Education (Table2)
According to our survey the educational levels of the MSE operators are; 6% illiterate where as
17% from grade 1-4, 16% from grade 5-8, 56% from grade 9-12, 4% above grade 12 and 1 MSE
operator did not respond to the question.


The above figure clearly shows that MSEs offer greater opportunities of creating employment not
only for educated people but also for the illiterate and low skilled labor force and it also implies
that most of the MSE operators are unable to get in to competition of modern business.




B. Sex
As shown in table 3, 71% of the respondents surveyed are men and 29 % of the MSE operators are
females. The above figure signifies that most of the respondents are men & this implies that men
own most of the MSEs.


C. Age
From the data in table 4, it can be observed that the age ranges of the MSE operators surveyed are:
15-20(5%), 21-30(36%), 31-40(30%), 41-50(17%), 51-60 (7%) and 5% above 60 years of old.


The above figure clearly indicates that most of the MSE operators surveyed are young and
productive people. This implies that MSEs are important sectors for generating employment
opportunities for young citizens.




                                                12
D. Number of Families (Table 5)
In order to assess the respondents‟ family size they were asked to specify their number of families.
According to the response their family size ranges from: 1-2 families (10%), 3-4 families (20 %),
5-6 families (26%), 7-8 families (19%) above 8 families (24%) and 1% of the MSE operators
surveyed did not respond to the question. The above figure clearly indicates that most of the MSE
operators have large family size. This implies that MSEs are the means of existence for many
people.


E. The Year that the Enterprise Established (Table 6)
As table 6 clearly indicates the establishment of the MSEs were: before the year 1983 E.C. (31%),
from the year 1983-1987 E.C (23%), from the year 1988-1992 E.C (35%) and after the year 1992
E.C (11%).
The above data clearly indicates that most of the MSEs were established after the year 1983 E.C.,
which implies that the free market economic policy, create conducive atmosphere for the
establishment & growth of MSEs.


F. Number of Employees and Number of Families that Participate in the Enterprises Activity
(Table 7 and Table 8)


As table 7 clearly shows 50% of the respondents responded that they have no employees, 24 % of
the respondents replied that they have 1-2 employees, 12 % of the respondents indicated that they
have 3-4 employees and 13% of the respondents stated that they have above 5 employees.


It can be observed from table 8 that 26%, 50%, 19% and 5% of the respondents responded that
they have no families, 1-2 families, 3-4 families and above 4 families receptivity that participate in
the enterprise's activity.




                                                 13
From the above figure it can be deduced that MSEs create employment for many people and most
of them as the same time use family labor.


G. Responsibility of the Respondents
From the data in table 9 it can be observed that 88% of the respondents are owners, 5% of the
respondents are administrators & 7 % of the MSE operators approached are representatives of the
enterprise. This implies that the owners themselves manage most of MSEs.


H. Establisher of the Enterprise (Table 10)
In order to assess as to who establish the enterprise 89% of the respondents responded that the
enterprise was established by them selves while 10% of the respondents replied that the enterprise
was established by others and 1% of the MSE operators surveyed didn't respond to the question &
this shows that most of the MSEs are established by the owners themselves.

3.2. Working conditions of MSEs
A. Problems faced During the Establishment of the Enterprise
The respondents were asked to state the problems faced during the establishment of their
enterprise. As table 11 indicates the problems existed during the establishment of the enterprise
were shortage of initial capital (53%), absence of premises (20%), lack of experience about the
business (5%), lack of survey /study/ (2%), lack of training before starting business (6%), all of the
problems mentioned above (3%), both shortage of initial capital and absence of premises (6%),
both shortage of initial capital and lack of training before starting business     (2%), shortage of
initial capital, absence of premises and lack of experience about the business (1%) and 2 % of the
respondents did not respond to the question.


From the above data it can be observed that the first major problem during the establishment of the
MSEs is lack of finance and lack of premises is the second serious problem. This implies that MSE
operators at their start have less access to formal financial institution.


B. The source of Initial Capital




                                                  14
As table 12 clearly shows the source of initial capital for the MSE operators were: 26% gift from
relative, 15% credit from relatives, 5% credit from bank, 8% credit from usurers, 40% from their
own savings, 4% credit from financial institutions and 2% both credit from relatives and from their
own savings.


This signifies that most of the MSE operators surveyed get initial capital from their own savings,
gift from relatives and credit from relatives. This implies that MSE operators have less access of
credit from banks and micro finance institutions.


C. Favorable Conditions to Start /Establish/ the Enterprise
The respondents were asked to declare the favorable conditions to establish their enterprise-As
table 13 clearly shows the favorable conditions to establish the enterprise were: 9% of the
respondents responded the availability of raw material, 47%of the MSE operators surveyed stated
the availability /existence/ of consumer, 25% of the respondents replied having experience about
the business, 13% of the respondents responded all the favorable conditions mentioned above and
4% of the respondents did not respond to the question.


From the above figure it can be observed that most of the MSE operators start /establish/ their
enterprise by assuming there is enough consumer for their product/ service, without any other
feasibility study /analysis of the business‟s profitability/ before implementation and this causes no
progress of the business, simply they start buying and selling the cheaper stock they can find
around.


D. The Instruments /Tools that are using for Production/Service
In response to the question whether the instruments/ tools that they are using for production or
service are modern or cultural, 61% of the respondents responded that it is modern, 32% of the
respondents replied that it is cultural and 7% the respondents did not respond to the question.
/Table 14/




                                                 15
Even though most of the respondents by comparing their instruments / tools / with their neighbor
responded their instruments / tools that they are using for production / service rendering activities
are modern we observed that most of the MSE operators have been used cultural instruments /tools
for their production / service rendering activities.


The respondents were asked the way they obtained the instruments /tools/ they are using for
production or service rendering activities. As table 15 clearly indicates 62% of the respondents
responded that they obtained by buying, 7% of the respondents replied that they obtained by
manufacturing, 3% of the MSE operators responded that they obtained from their family
inheritance, 12% of the respondents responded that they obtained by rent, 1% of the selected
sample obtained both by purchasing and by manufacturing and 15% of the respondents did not
respond to the question.




The result of the survey clearly shows that most of the MSE operators obtain an instrument /tool
for production/ service rendering activities by purchasing from the market.


E. Seasonality of the Demand of the Product/Service/ Table 16/
In response to the question whether the demand for their product /service is seasonal, 64% of the
respondents responded that it is seasonal, 35% of the MSE operators surveyed declared that it is
not seasonal and 1% of the respondents did not respond to the question.


This reveals that the demand for most of the MSEs product or service is seasonal because as we
observed in many cases their market depends on the farmer's seasonal products and farmers are the
main clients of their business.


F. Profitability of the Enterprise / Table 17 and Table 18/
The respondents were asked to state the degree of profitability of their enterprise. According to the
response 2% of the respondents responded that they are highly profitable, 73% of the MSE




                                                   16
operators approached replied that they are quite profitable, 21%of the respondents stated that their
enterprise is not profitable and 4% of the respondents did not respond to the question. /Table 17/


The approached MSE operators who are not profitable were asked to state the reasons for not
being profitable. They stated that the reasons for not being profitable are: shortage of raw material
/12%/, lack of finance/capital (36%), lack of training in business management (13%) and lack of
market (39%). /Table 18/


The above figure clearly shows that a significant number / 21%/ of the MSE operators are not
profitable mainly because of lack of market & lack of finance/working capital /




G. Advertisement /Table 19, 20, 21/
In response to the question whether they are advertise or not their product/ service, 25% of the
respondents responded that they were advertise their product/ service while 75% of the MSE
operators did not advertise their product or service.


From those who advertise their product/service 63% of the respondents responded that they
advertise by means of placards, 5% of the MSE operators approached replied that they advertise by
means of newspaper, 22% of the respondents are using sample of the product as means of
advertising mechanism, 1% of the respondents replied that they advertise by means of bazaar and 9
% of the respondents did not respond to the question.


The respondents were asked why they have used the above advertising mechanisms. The reasons
are least price/56%/, accessibility /27%/, lack of awareness of other options/15%/ and 2% of the
respondents did not respond to the question.




                                                  17
H. Quality of the product or service (Table 22)
Respondents were asked how they measure the quality of their product or service. The mechanisms
for the measurement of the quality of the product or service of the approached MSE operators are:
2% by checking the quality of the product by national standard, 10%by having many clients, 78%
comments from clients and 10 % of the respondents did not respond to the question.


The above figure clearly indicates that most of the MSE operators measure the quality of their
product or service by having a feedback /comments/ from their clients. This implies that most of
the MSE operators have an experience of accepting comments from clients.


I. Information /Table 23,24/
In response to the question whether information is necessary or not to develop their business, 87%
of the respondents responded that information is necessary to develop their business while 13% of
the MSE operators surveyed replied that information is not necessary to develop their business.


Those respondents who replied information is necessary to developed their business were asked
the necessary information to their business activity but not able to obtain. According to the
response, 76% of the MSE operators approached replied that they lack information about credit
service, 68% of the respondents responded that they have no access to market information, 51% of
the respondents stated that they can‟t get information about technology and 71% of the sample
surveyed replied that they can‟t get information about government rules and regulations.


The above figure clearly shows that most of the MSE operators cannot get information about credit
service, market, appropriate technology and government rules and regulations. This implies that
most of the MSE operators have poor access to credit, market, appropriate technology and
goverment rules and regulations.


J. Willingness to be a Member of the Cooperative /Table 25/




                                                18
The MSE operators approached were asked whether or not they are willing to be a member of the
cooperative who are in similar lines of business as themselves. According to the response 73% of
the respondents replied that they are willing to be a member of the cooperative while 25% of the
MSE operators surveyed responded that they are not willing to be a member of the cooperative that
work the same business activity as themselves and 2 % of the respondents did not respond to the
question & this implies that most of the MSE operators have an awareness about the importance of
being the member of the cooperative.


K. Training /Table 26, 27/
As table 26 clearly indicates 14 % of the respondents responded that they took training after they
start their business activity while 86% of the MSE operators approached replied that they did not
take any training after they start their business activity. From those who took training after they
start their business activity, 83% of the respondents stated that the training is very important, 15%
the MSE operators approached responded that the training is quite important and 1% of the
respondents replied that the training they took is not important for their business activity. This
implies that most of the MSE operators run their business with out any training because of the
concerned governmental institutions, the MSE operators themselves and non governmental
organizations involved in this area have not paid special attention for training.


L. Book of Account /Table 28,29/
The MSE operators surveyed were asked whether or not they have a book of account for their
business activity. According to the response 34% of the respondents responded that they have a
book of account for their business activity while 66% of the MSE operators approached replied
that they do not have any book of account for their business activity.


Those MSE operators approached who do not have a book of account were asked why they do not
have any book of account for-their business activity. The reasons are lack of trained manpower
(21%), unable to employ an accountant (33%), believing that it is unnecessary (40%), both lack of




                                                  19
trained manpower and unable to employ an accountant (5%) and 1% of the respondents did not
respond to the question.


The survey conducted reveals that most of the MSE operators do not have any book of account for
their business activity because of lack of awareness of the significance of a book of account to run
their business and unable to employ an accountant because of high salary demanded by
professionals in the field.


3.3. Problems, which have been confronted by MSEs in Business
           Type /sector specific/ Table 30/
A. Food and Beverage
From this business type 27 MSE operators were surveyed to assess the problems they are facing
with.


According to our survey, the problems this sector facing with are: lack of market (78%), lack of
finance/working capital (70%), lack of information and advice (56%), problems related to
government rules and regulations (52%), lack of sufficient training (52%), lack of premises (41%),
shortage of the supply of raw materials (30%), lack of infrastructure (22%) and cultural influence
(19%) respectively according to severity. The above figure clearly indicates that the most severe
problem of this sector is lack of market and the second severe problem is lack of finance/ working
capital.


B. Textile
To identify the problems of MSE operators in textile business type 36 MSE operators were
approached. According to our survey the problems of those operators in textile business type are:
(86%) problems related government and regulations, (83%) lack of market, (78%) lack of finance,
(61%) lack of sufficient training, (58%) lack of information and advice, (42%) lack of premises,
(39%) cultural influence, (33%) shortage of supply of raw material and (31%) lack of
infrastructure respectively.




                                                20
It can be observed from the above figure that problems related to government rules and regulation
like license, taxation and the like are the most severe problems faced by those operators in textile
business type. Lack of market and lack of finance / working capital are the second and third sever
problem respectively of those operators in this sector.


C. Woodwork
From those MSE operators in the woodwork sector 5 operators were surveyed to assess the
problems they face.


According to our survey the problems that have been faced by the wood work sector are: lack of
market (100%), problems related to government rules and regulations and lack of finance/capital
equally (80%), lack of premises and lack of sufficient training equally (60%) shortage of supply of
raw materials, lack of information and advice, cultural influence and lack of infrastructure equally
(40%).


The above figure clearly shows that lack of market is the most serious problem of the woodwork
sector.


D. Service Trade
83 MSE operators are surveyed in this sector. According to our survey lack of market (90%), lack
of finance (77%), problems related to government rules and regulations (69%), lack of information
and advice (64%), shortage of supply of raw material (53%), lack of sufficient training (46%), lack
of premises (41%), lack of infrastructure (35%) and cultural influence (31%) are problems of MSE
operators in service trade.


From the above figure it can be deduced that lack of market and lack of finance/working capital
are the first and the second severe problem respectively of the service trade business type.




                                                 21
E. Whole Sale Trade
In this sector 12 operators are approached to assess the problems they face. From the survey-
conducted problems related to government rules and regulations (67%) is the first series problem
while lack of finance (58%) and lack of information and advice (58%) are equally the second sever
problem of this sector. Lack of market (50%) and lack of sufficient training (50%) are the third
sever problem, which equally affect this sector. The fourth problem of those MSE operators in
wholesale trade is cultural influence (25%). Shortage of supply of raw materials (17%), lack of
premises (17%) and lack of infrastructure (17%) are the 5th problems, which affect this sector.


The above figure clearly indicates that problems related to government rules and regulations like
taxation is a bottleneck to the development and expansion of the wholesale trade.


F. Retail Trade
To assess the problems of operators in retail trade 186 MSE operators are approached. According
to our survey the MSE operators in retail trade are facing with the following problems: lack of
market (88%), lack of finance (82%), lack of information and advice (56%), problems related to
government rules and regulations (55%), lack of sufficient training (50%), lack of premises (37%),
lack of infrastructure (35%), shortage of supply of raw material (34%) and cultural influence
(34%).


It can be easily observed that lack of market and lack of finance are the leading and the next
leading sever problems respectively for those MSE operators in retail trade sector.


G. Other Informal Sectors /Photography, washing and ironing, tailoring, gullt, listro, etc./
To assess the problems of the operators in the other informal sector a survey is conducted on 36
MSE operators.


According to our survey lack of finance/working capital (89%), lack of market (60%), lack of
premises (50%), lack of information and advice (50%), lack of sufficient training (47%), problems




                                                 22
related to government rules and regulations (32%), shortage of supply of raw material (26%),
cultural influence (24%) and lack of infrastructure (8%) are the problems of the operators in the
informal sector.


The above figure clearly indicates that lack of finance is the most sever problem of the operators in
this sector.


3.4. The level of problems which have been confronted by MSEs /Regional/ -(Table 30)
According to our survey, the MSE operators face with several problems and constraints that affect
the role they play in the socio-economic condition of the region. From a number of problems the
MSE operator's encounters in their day-to-day activity, the following sever problems are treated
below:




A. Lack of market
The first sever operating difficulties of the MSE operators according to our survey is lack of
market.


Out of the 387 MSE operators surveyed (83%) responded that they are facing with lack of market
while (17%) of the respondents replied that they do not encounter with market problems.


From the above figure it can be observed that most of the MSE operators are faced with lack of
access to market and inability to sell their products and services.




                                                  23
This implies that there is lack of focus on providing basic marketing techniques that the operators
should have to promote the marketing of their goods/services and lack of practical assistance in
marketing the products of the operators.


B. Lack of Finance /Capital/
The second most severe problem to the growth and development of the MSEs is lack of finance /
the working capital.


It is undisputed fact that all types of services such as training, counseling, managerial and technical
skill development should be accompanied by the provision of finance, in order to improve and
strengthen the support provided.


According to our survey, (80%) of the MSE operators approached responded that they have a
critical problem of finance/capital while (20%) of the respondents replied that they do not face
shortage of finance.


The above figure clearly indicates that most of the MSE operators have faced a critical problem of
finance and it also indicates that the portion of MSE operators with access to formal financial
institutions is very low.


This implies that the formal financial institutions are reluctant to avail credit facilities to MSEs and
it also implies that MSE operators lack knowledge about available financing programs or the
process of application.


C. Problems Related to Government Rules & Regulations
Problems related to government rules and regulations like license, taxation, registration, etc is the
third severe problem facing the MSE operators.




                                                  24
According to our survey (59%) of the respondents replied that they face a problem related to
government rules and regulations while (41%) of the MSE operators approached responded that
they do not face a problem related to government rules and regulations.


The above figure clearly indicates that most of the MSE operators have been faced with
government rules and regulations. It may be because of a significant number of the MSE operators
are working without license and they are not officially registered and recognized by the regional
government and as the MSE operators also reported that the rise of the amount of taxation is also a
serious problem in their operation.


This implies that most of the MSE operators are unclear regarding government rules and
regulations and the government criteria for license and registration are so strict.


D. Lack of Information and Advice
According to the survey-conducted lack of access to appropriate and relevant information and
advice is the 4th severe problem faced by MSE operators.


Creating access to information and advisory services to MSE in income generating entrepreneurial
activities is highly crucial not only for their growth but also for their sustainability.


MSE operators need information about market, source of finance, appropriate technology, source
of raw materials and inputs, sources of special services related to training, product design,
government rules and regulations, etc.


/57%/ of the respondents responded that they have encountered lack of information and advice
while /43%/ of the respondents replied that they have not faced with lack of information and
advice.




                                                    25
This implies that business information is not adequately provided to the beneficiaries in the region
as a whole and the MSE operators often do not recognize the crucial importance of business
information services and are not in a position to receive information on fee basis.


E. Lack of Sufficient Training
This is the 5th sever problem faced by the MSE operators the acquisition of relevant vocational,
technical and business skills is generally regarded as one of the critical factors for success in
MSEs. Training would help to increase efficiency of MSE operators and enables the MSE
operators to be competitive in the market.


According to the survey (50%) of the respondents responded that they lack sufficient training
while (50%) of the MSE operators surveyed replied that they have not been encountered with lack
of sustainable training.


This implies that the range of relevant training on vocational, technical and business skills made
available to micro and small enterprises is very low and it also implies that MSE operators lack
awareness about the already existing training facilities and what they offer to this sector.




F.Lack of Premises / Working Place




                                                  26
THE   DEVELOPMENT OF BUSINESS AND INDUSTRIAL PREMISES WARRANT THE                   GROWTH AND

EXPANSION OF BUSINESS ENTERPRISES.         LACK   OF WORKING PLACE INCLUDES A PROBLEM OF

LIMITED PLACE OR NOT BEING CONVENIENTLY LOCATED TO AREAS WHERE CLIENTS CAN EASILY

REACH THEM OR WORK IN RENTED HOUSES, WHICH ARE VERY EXPENSIVE IN TERMS OF COST.



ACCORDING TO OUR SURVEY LACK OF PREMISES / WORKING PLACE IS THE 6TH SEVER PROBLEM OF
MSES. IN RESPONSE TO THE QUESTION WHETHER THEY ENCOUNTER WITH LACK OF PREMISES OR
NOT, (40%) 0F THE RESPONDENTS REPLIED THAT THEY HAVE BEEN FACED WITH LACK OF PREMISES

WHILE   (60%)   OF THE   MS E   OPERATORS SURVEYED RESPONDED THAT THEY HAVE           NOT   BEEN

ENCOUNTERED WITH LACK OF PREMISES.



This implies that the constructed commercial premises are not sufficient /enough/ for the MSE
operators and the existing land acquisition procedures do not consider accessibility of land for
MSE operators.


G. Shortage of the Supply of Raw Materials
In order to assess the availability of raw materials, the MSE operators surveyed were asked
whether they have faced with the shortage of the supply of raw material or not. According to our
survey shortage of raw materials is the 7th problem faced by MSE operators.


From the MSE operators conducted (37%) of the respondents responded that they encountered
with the shortage of supply of raw materials while (63%) of the respondents replied that they have
not faced with the shortage of supply of raw materials.


From the above data it can be observed that smooth supply of raw materials to MSE is not
adequate & this implies that raw materials needed by micro and small enterprises are not
sufficiently available around the working place of MSE operators.


H. Cultural Influence




                                                  27
In the past decades and still now, the attitude of the public to the importance of the sector
especially for handicrafts is negative due to cultural influence.


Cultural influence is the 8th problem faced by MSE operators. According to our survey (32%) of
the respondents responded that they have faced with cultural influences while (68%) of the
respondents replied that they haven't encountered with cultural influence.


This implies that even though, there is an improvement still their cultural problems to expand MSE
activities.


I. Lack of Infrastructure Facilities
According to our survey a significant number of MSE operators are facing serious problems
regarding lack of infrastructure. Infrastructure facilities like transport, the supply of electricity,
water, telecommunication connections & sewerage systems are crucial infrastructure facilities,
which guarantee the growth and expansion of MSEs. Lack of infrastructure facilities is the 9 th
problem faced by MSE operators.


From the 387 MSE operators surveyed (31%) of the respondents responded that they have been
confronted by lack of infrastructure facilities while (69%) have not been faced with lack of
infrastructure facilities.


Even though most of the MSE operators responded that they didn‟t face these problem
infrastructure facilities is one of the obstacles for MSEs.




                                                  28
A SURVEY ON IDENTIFICATION OF PROBLEMS FACED BY MICRO AND
SMALL ENTERPRISES
     First of all our sincerest gratitude goes to those who scarifies their precious time to respond
      these questionnaires.
     This study is aimed to find out the fundamentals problems and obstacles of Micro and
      Small enterprises to start, expand and develop their business activity and recommend
      alternative solutions.
     Please give your answer with '' X'' on the space of each question, given bellow.
  1. The operator's
         a. Zone ____________ Woredas _____________ Town ________________
         b. Educational level _______________ Sex ____________ Age_________
         c. No of families __________________________
         d. Type of business _________________ Type of activity _____________
         e. The year that your organization established _______________________
  2. What is your responsibility in the enterprise? _____________________________
  3. How many employees are there in your enterprise? ________________________
  4. How many families participate in the activities of the enterprise with out payment?
      _____________________________
  5. Are you the establisher of this enterprise?
      A/ Yes ___
      B/ No ___
  6. What are the problems existed during the establishment of the enterprise?
      A/ Shortage of initial capital ___
      B/ Absence of premises ___
      C/ Lack of experience about the business ___
      D/ Lack of survey / study ___
      E/ Lack of training before starting the business ___
      F/ All of above ___




                                                29
   G/ Other ___
7. The source of your initial capital?
   A/ Gift from relatives ___
   B/ Credit from relatives ___
   C/ Credit from bank ___
   D/ Credit from usurers ___
   E/ From my own saving ___
   F/ Credit from Institutions ___
8. What was the favorable condition to establish the enterprise?
   A/ Availability of raw materials ___
   B/ Availability of consumer ___
   C/ Experience about the business ___
   D/ All of above ___
   E/ Other ___
9. The instruments / tools that you are using for production / service is: -
   A/ Modern ___
   B/ Cultural ___
10. How can you obtained the instruments / tools?
   A/ By buying ___
   B/ By manufacturing ___
   C/ Inherit from family ___
   D/ By rent ___
   D/ Other ___


11. Is the demand of your product / service seasonal?
   A/ Yes ___
   B/ No ___
12. How is the degree of profitability of your enterprise?
   A/ Highly Profitable ___




                                              30
   B/ Quite Profitable ___
   C/ Not Profitable ___
   D/ Other ___
13. What is the reason? If your answer for question # 12 is Not Profitable
   A/ Lack of raw materials ___
   B/ Lack of finance/ working capital ___
   C/ Lack of training in business management ___
   D/ Lack of market ___
   E/ Other ___
14. Do you advertise your product / service
   A/ Yes ___
   B/ No ___
15. If your answer is '' yes '' for question No 14 what kind of advertising mechanism you use?
   A/ Placards ___
   B/ News paper ___
   C/ Radio ___
   D/ Television ___
   E/ Sample of the product ___
   F/ Exhibition ___
   G/ Bazaar ___
   H/ Other ___


16. What is your reason for using such type of advertising mechanism?
   A/ Least Price ___
   B/ Accessibility ___
   C/ Lack of awareness of other options ___
   D/ Other ___
17. How do you measure the quality of your product / service?
   A/ By checking the quality of the product by national standard ___




                                              31
   B/ By having many clients ___
   C/ Comments from clients ___
   D/ Others ___




18. Do you think that information is necessary to develop your business?
   A/ Yes ___
   B/ No ___
19. If your answer is yes for question No 18, which of the following information is necessary,
   to you‟re business but not able to obtain?
   A/ Information about credit service ___
   B/ Information about market ___
   C/ Information about technology ___
   D/ Information about rules and regulations ___
20. Are you willing to be a member of the cooperative that are in similar lines of business as
   yours?
   A/ Yes ___
   B/ No ___
21. Did you take any training after you start your business?
   A/ Yes ___
   B/ No ___
22. If your answer is yes for question no 21, state the type of training you took
   __________________________________________________________________




23. If you took any training, how is the degree of importance of the training?
   A/ Very important ___
   B/ Not important ___
   C/ Quite important ___




                                             32
   D/ Other ___
24. Do you have any book of account to your business activities?
   A/ Yes ___
   B/ No ___
25. What is your reason if your answer is ''No'' for the question No 24?
   A/ Lack of trained manpower ___
   B/ Unable to employ an accountant ___
   C/ believing that it is unnecessary ___
   C/ Other ___
26. Which of the following problems are obstacles for your business?
   A/ Shortage of raw materials                   Yes ___       NO ___
   B/ Lack of finance / Working capital Yes ___NO ___
   C/ Lack of market                              Yes ___       NO ___
   D/ Lack of premises                            Yes ___       NO ___
   E/ Lack of Information & Advice                Yes ___       NO ___
   F/ Cultural influence                          yes ___       NO ___
   G/ Lack of sufficient training                 yes ___       NO ___
   H/ Problems relates to Goverment rules and
                           Re questions           yes ___       NO ___
   I/ Lack of Infrastructure                      Yes ___       NO ___
27. In your opinion, what the government to alleviate those problems, which have been
   confronted by MSEs, should do?
____________________________________________________________________________
____________________________________________________________________________
_______________________________________________________




28. If you have further opinion: please write it down.




                                             33
   ____________________________________________________________________________
   ____________________________________________________________________________
   _______________________________________________________




Date _____________________
Town ____________________



   Bibliography
      Andualem Tegene, '' A study on private business advisory and counseling services for
       Micro & Small enterprise in Ethiopia'' prepared for Ethio – German Micro & Small
       enterprises development project Addis Ababa: Ethiopia; June 2001.


      ANRS’, Proclamation No 42/1999. Bahirdar


      ANRS’, Reseda strategy booklet, Bahirdar


      Assegedech Woldelul. „„ Study on marketing strategies for Micro & Small enterprise with
       a focus on trade fair concepts & organization''. Addis Ababa April 2001.


      Corman, Joel & N. Lussier, Robert '' Small business management Applying Approach
       USA, Me GRAW-Hill.


      Dransfield, Robert & Reedman, David “ Business studies'' second edition. Great Britain:
       Scot Print Ltd, 1994.




                                               34
LIST OF ABBREVIATIONS

ANRS          __ Amhara National Regional State

ReMSEDA __ Regional Micro and Small Enterprise Development Agency

NGO          __ Non-governmental Organizations

NGO‟s        __ Non-government Organizations

MSE           __ Micro and Small Enterprises

MSEs         __ Micro and Small Enterprises

CSA          __ Central Statistics Authority

GOV‟t         __ Government

E.C           __ Ethiopian Calendar




Forword
The desired goal of this study is to highlight the performance gaps, which originate from lack of
knowledge, skill or attitude, in the technical, vocational and Entrepreneurial operations of sampled
private enterprises (excluding parastatals) in the ANRS – ReMSEDA Zones. Such a survey is new
to the region. The ReMSEDA feels great to produce this document.


Part one of this draft study starts with the introduction and definition of concept, and briefly
discusses on the significance and objectives of the survey. A profile of sample target group is also
included in this part.


Part two is all about methodology. And survey issues, data sources, sampling and data collecting
techniques are explained.




                                                35
Part three is the core of this report, which is conveyed Reliability of Training Needs Analysis
verifications, and task analysis is made on the basis of survey findings and data interpretation.


Part Four shall look into the remarks as suggested by owners /operators themselves. The
suggestions are classified into four categories using similarity of remark followed by conclusion
and recommendations.




                                                  36
PART ONE - INTRODUCTION
1. 1. Statement
In the ANRS have been producing goods and services day and night (for several years.) Yet, the
quality of goods and services has not been improved. Market problems occur. The owners do not
make profits as much as they expect. Their life standards have not moved an inch forward.
Employee‟s salaries are meager (very low and from hand to mouth) what is the reason why this has
occurred, that this whole effort has been fruitless? One reason among many others may be, the
owner or the employee or both lack knowledge, skill or attitudes that contemporary markets
had been and are demanding.


In the following parts of this paper, we shall try to examine, as much as possible, the current
operational state of the enterprises as practiced by the entrepreneur and the desired state thereby
classifying the discrepancy as knowledge, skill or attitude.


1.2. Definition of concepts and terms
1.2.1. what are training needs?
'' … Training needs in general terms are the DISCREPANCY between the current state of a system and
the desired state. Or a training need occurs when an employee or a group of employees are unable
to perform tasks assigned to them for lack of knowledge, skill or attitude… '' 1


1.2.2. Micro and Small Enterprises
ANRS ReMSEDA strategy defines MSEs based on capital size and use of consultancy firms and
technology. As per the category Micro enterprises are those small businesses whose paid up capital
is not exceeding 20,000 ETB. Small enterprises are those with a paid up capital above 20,000 ETB
and not exceeding 500,000 ETB. Both enterprise avoid the use of high consultancy firms and high
technology

_______________
1
    Lecture note, TOT course, EMI




                                                 37
 1.3. Significance of the Study
There were some NGOs and other governmental organizations like office of Women's Affairs,
BOTI, which have been worrying about organizing training program to their respective target
groups. These bodies were, in fact, aware of the importance of the training program, but still their
training schedules emanate from urging conditions. A deep-rooted survey of the problem as such
has never been conducted before by any one of them. It is believed that this survey serves for many
donors to investigate the agenda as a serious case.


1.4. Objectives of the Study
Many an enterprise is emerging1 daily to share with the troubles of the already existing ones. These
enterprises are shouldered with the challenges of unemployment and food insecurity.2 In general,
they are considered as alternative courses for developmental efforts.


On the other hand, quality of goods and services has become the order of the day. Without
tremendous exposure to the modern market concepts, which are available in trainings, no
enterprise can achieve quality goal. They lack quality and hence they do not compete in the
market. '' The size and quality requirements of government orders may also serve to limit the
participation of many small enterprises''3


It is imperative; therefore, that the owners/operators be equipped with what modern entrepreneurial
philosophy requires in order coping up with the challenges. Before the training is conducted and at
the preparatory level of the baseline survey of training needs assessment project the team has a
data collecting format designed to trace out the following: -
    1.        The extent of the demand for training needs in the sampled zones.
    2.        The type of the need for training (i.e., vocational, technical or business management)


_________
1
  Derek C. Jones, The nature and performance of small firms in Bulgaria, IRIS working paper No. 99 FEB. 1994,P 3.
2
  ANRS – ReMSEDA Draft strategy, May 2001.
3
  Liedholm, Carl and Mead Donald, Small-scale industries in developing              countries: Empirical evidence and policy
implications, MSU international development paper (no.9) 1987,and p 58.




                                                            38
1.5. Scope and Coverage
    To maximize reliability of information and to the maximum efficiency of the survey, the
    Informants of our survey are the owners only. The owner's alone; their family did not,
    Decide on the affairs of the enterprises. (Be it demand for training or whatsoever)


    Due to scarce financial and other supportive measures (like vehicle), which attribute to
    Infancy of the Agency, the spatial coverage of data is fixed at 45% of the total number of
    Zones in the ANRS, and share of woredas covered by the survey is 19.2% of the total
    Number of woredas


Table 1 Spatial coverage
S.N.       Zone                                                     Existing woredas2             Covered by survey
1          North Gender                                             15                            4
2          West Go jam                                              11                            3
3          East Go jam                                              16                            2
4          South Wollo                                              18                            3
5          North Shoa                                               18                            3
           Total                                                    78                            15
           Percentage (%)                                           100                           19.2%




       __________________
       1
        Carl lied Holm and Donald Mead, Small Scale industries in developing countries: Empirical Evidence and Policy
       Implications, MSU international development paper (No. 9) 1987,p.29.
       2
           Bureau of Trade and Industry, ANRS, Statistical Bulletin, No. IV, Dec., 1998.




                                                                  39
PART TWO


2.METHODOLOGY

2.1. Systemic Training Module 1
The survey is planned to use a systematic training model, which has greater relevancy to the
present effort. Methodology of TNA also makes it imperative the use of it. The model has six
steps. These steps are
1.formulation of a training policy
2.establishment of training organization
3.training needs analysis (TNA)
4.planning training sessions
5.conducting training
6.impact evaluation and feedback


           Training Policy                  Establish training
                                            Organization


           Evaluate program                 Training need
           Training                         assessment




           Carry out                        Plan training
           Training                         program


Fig. 1 Systematic training module
The first two top boxes will not be considered here because policy formulation and training
organization steps are given in the proclamation providing for the establishment of the Agency.
1
    Lecture note, TOT course, EMI




                                                40
       Where training organization is established and training policy is formulated the steps that systemic
       training need analysis (TNA) should be given due attention, are the following. in our case, with
       particular emphasis to the training needs assessment, (shaded part of the diagram)
       1.identify training needs (TNA)
       2.plan training
       3.carry out training and
       4.evaluate training


       2.2. Determination of the Sample
       In all the five zones 390 enterprise holders are interviewed; attempts have been made to include all
       the sectors of MSE in the survey. From a population of 37375 enterprises the representation ratio is
       as in the following two tables (2 and 3). First, zones are selected/stratified/ on the basis of criteria
       adapted by the Agency (like density of population, target trade type etc). Second, samples are
       taken based on stratified probability sampling method.


       Table 2. Total population
                                     ZONES
S.N Sectoral Diversity               North  West               East       South       North        Total
                                     Gondar Gojam              Gojam      Wollo       Shoa.
1    Leather works                   131    68                 112        135         82           528
2    Metal works                     29     17                 14         26          9            95
3    Food and Beverages              329    432                588        458         674          2481
4    Textile                         1793   398                430        408         589          3618
5    Handicrafts                     18     26                 4          19          9            76
6    Wood works                      23     48                 30         32          2            135
7    Service rendering               1642   3115               579        1360        944          7640
8    Wholesale trade                 424    165                195        263         188          1235
9    Retail trade                    7665   2122               2466       2301        3338         17892
10   Contractors grade 9&10          3      75                 25         17          15           135
11   Micro operators                 367    898                898        332         1045         3540
                                     12424  7364               5341       5351        6895         37375
                                     33%    20.5%              14%        14%         19%          100%

       Source: - ReMSEDA, ANRS survey data, 1993 E.C.




                                                         41
    Furthermore, data sources are made to have sectoral diversity designed to facilitate the study of
    task analysis (Table 2). This type of classification clearly shows the separate functions (activities)
    of each sector thereby avoiding functional overlap. For example, take food and beverage sector as
    a base of task analysis study. In this sector there are services rendering traders, retailing traders,
    wholesaling traders, small manufacturers, etc. These different activities packed in one basket (food
    and beverages sector) cannot be studied as they are. The sector has to be further classified so that
    task analysis will be easy.


    Table 3.SECTORAL DIVERSITY OF DATA SOURCES

                  Small                                   Retail &    Micro
S.N Zone          Scale           Handicrafts Service Wholesale loan            Others Total
                  Industry                                Trade       user      *
1   N/Gondar      24              12          24          62          2         4        128
2   W/Gojam       12              7           13          35          5         6        78
3   E/Gojam       8               10          9           22          3         3        55
4   S/Wollo       15              8           9           16          2         5        55
5   N/Shoa        15              7           16          29           -        7        74
    Total         74              44          71          164         12        25       390
                  19%             11%         18%         42%         3%        7%       100%


    Source: - Survey result
    * Indicates 'Gulet Gebeyas …'




                                                     42
2.3. Sampling Techniques1
The numbers of enterprises to be questioned (sample size) were obtained, right from the beginning
of the survey project, by determining, from a total population of 37375.


       1.Mean = 3397
       2.S.D.= 5339
       3.Population proportion = 50% of total population
       4.Required level of accuracy = 5% of population proportion
       5.Level of confidence (95%) = 2 - Given
       6.Formula for Sample size ( N ) = S.D X Confidence level
                                                  Accuracy
       7.Sample size (result of No. 6) is taken threefold for the purpose of accuracy.
       8.After all this calculation, the sample size 390 is rationed to sample zones by percentage as
            indicated in table 3.




_____________
1
    These formulae are formerly used to determine the sample size. The mathematical
    Formulae are adapted here for precision.




                                                                    43
    2.4.Data sources and Data Gathering Techniques
    A. Data sources.
    The used sources of data are both primary and secondary. Primary information is obtained
    from owners alone and these are the most used sources. Secondary data sources are like
    bulletins and references used etc.


    B. Data gathering techniques
.   Questionnaire
    detailed questionnaire was prepared to assess the need for and the type of training (appendix 1).
    The questions are as far as possible, designed to guide to the desired goal of the survey.
    The questionnaire was carefully designed to have details about the enterprises, the owners and
    their training demands. It also crosschecks information obtained from one question by another
    question. For example, the answer obtained from question no.6 of expectations table is
    crosschecked by responses, which can be obtained from task analysis table, (8th, 9           th
                                                                                                      and 10   th


    responses – Table 11)


    2. Observation
    Another technique used to gather data, together with questionnaire, is personal observation. Two
    experts from the department of training, ANRS- ReMSEDA, together with zonal Trade and
    Industry departments contacted randomly micro and small enterprise operators/owners, questioned
    them, and filled the questionnaire. Due attention has been given to, therefore, all procedures of
    training need analysis such as task/ job study and personal observation during interviewing in the
    survey study to fulfill the task.




                                                     44
PART THREE
DATA ANALYSIS AND INTERPRETATION

3.1. Continuity of Business
In training reliability, though it depends very much upon training package type and level
of education of target group, makes difference. Without assuring reliable base on which
to conduct training it would be meaningless to do Training Needs Analysis. Here
reliability is assumed to be achieved only if there is continuity of business, i.e., the age of
a given business is not so short (which in turn depends on its clientele and profitability)
and by the change it has brought over its holders, and by the mode of continuing (by
diversification and expansion)


Owners/ operators were questioned as to whether they would continue or not with their
businesses at hand. To the relief of the survey, 90% of them tell us that they will continue
with their present businesses either by expanding the contents of the present one or by
diversifying the trade type (Table 4). Hence, continuity of business is assumed, to some
extent, by preferred way of continuing with business. As the result of the survey shows,
84% of the respondents have planned to go on with their business by expanding the
present one and 16% assured to continue by diversifying the business type (Table4).


 Table 4. Reliability Measures
                                          to
                                         you


                                 with your




                                                           course of
                                                           action to
                                                           Preferred
                                 continue




                                                           continue
                                 business
                                 present
                                 want
                                 Do
                     Zone




                                 YES        NO             Expansion   Diversity
               No.




                                 NU    %    NU        %    NU     %    NU %
              1      N/Gondar    114   89   14        11   99      -   15    -
              2      W/Gojam     72    92   6         8    60      -   12    -
              3      E/Gojam     51    87   4         13   45      -   6     -
              4      S/Wollo     51    95   4         5    46      -   5     -
              5      N/Shoa      65    88   9         12   46      -   17    -

                       -         353   90   39        10   296   84%   55    16%
               Source: - Survey Result




                                                 45
3.1.1. Age of Firms and continuity of Business
In this respect, a Bulgarian Economist, Derek C.Jones1, in his working paper 'The nature
and performance of small firms in Bulgaria' tells us that 83% of his surveyed small firms
were known to have been in existence for fewer than two years and that in the middle of
the 1992, the age of the average private firm was 16 months.


The reasons for these enterprises being 'a candle light in the wind' may be as many as
uncountable. Some of them may be government regulation on ownership and
unprofitability. But there was no state participation on ownership2 but crowding out
effect through unprofitability might have held true.


Fortunately enough, however, the small firms in our survey whose age is proved to be
over six years were 51% of the sample size (Table 5).


                               TABLE 5 – AGE OF FIRMS

          S.N Z O N E S                  AGE                   Total
                                         6–9           10+
          1     North Gondar             10            52      62        48%
          2     West Gojam               18            18      36        46%
          3     East Gojam               5             32      37        67%
          4     South Wollo              6             18      24        44%
          5     North Shoa               10            28      38        51%
                Total                    49            148     197       51%
                    Source: - Survey Result



1
    Derek C. Jones, The nature and performance of small firms in Bulgaria, IRIS
working paper No. 99 FEB 1994, P., 5.
2
    Cited, p., 5.




                                              46
3.1.2.Market problems and continuity of business
Another indicative measure of continuity of business is the fact that, respondents gave
answer to continue despite market problems. From the respondents 51% of those who
have said to continue are determined to challenge with their market problems (Table 6).
Again here, other things remaining normal, logic may lead us to the conclusion that they
have positive experiences with profitability of business. Entrepreneurs '' … concentrate
on specific niches that are the most profitable or less served by the parastatals'' 1


Table 6. MARKET PROBLEM - HOTEL’S GROUP


No.    Zones                    Who        continue    Complaints          Complaints      of   No. Of hotels group
                                with           their   (market problems)   market problems in   who complain Market
                                businesses                                 service sector       problem
1.     North Gondar             114        89%         32        28%       24         86%       6       25%
2.     West Gojam               72         92%         47        65%       13         28%       2       15%
3.     East Gojam               51         93%         35        69%       9          26%       5       56%
4.     South Wollo              51         93%         30        59%       9          30%       5       56%
5.     North Shoa               65         88%         37        57%       16         43%       4       25%
                                353         -          181       -         71          -        22       -
       %                         -                     51%       -         37%                  31%      -


         Source: - Survey result




_____________
1
    Scott Simons, Public and private trading in Ethiopia: Liberalization of
markets, phase II report, January 1993, p., 10.




                                                47
3.1.3 Clientele and continuity of Business
Owners /operators do not specialize in one commodity. They shift from one to another
when it is necessary. The most traded items are grain (food items) and textile and services
like hotels. These goods and services are sold directly to the final household consumer
rather than through commercial intermediaries. This is because of being light consumer
goods. Whatever they trade, most of them about 93% of the surveyed enterprises serve
for personal consumption (Table 7).


The enterprises are near to the consumer (to their clients). They know (1) when the
consumer is willing to buy (2) consumer goods are not seasonal (3) they are traded
throughout the year with greatest share during and after harvesting     (4) What ever the
price is the consumer willing to pay.


One can argue, therefore, that suppliers of consumption goods and services exist as long
as consumers exist.




Table 7. Clientele

                       Clients
S.N Zone               Personal     %      Wholesaler    %      Foreigners    %      Remark
                       consumers           & retailer
1     North Gondar     113          88     12            10     3             2
2     West Gojam       70           89     8             11      -             -
3     East Gojam       54           98     1             2       -             -
4     South Wollo      51           93     3             5      1             2
5     North Showa      71           96     3             4       -             -
                       359          93%    27            6%     4             1%

               Source: - Survey result




                                            48
3.1.4 Change in life standard and continuity of Business
In the survey, it is found that 81% of the respondents of the question 'Do you have other
means of income?' complain of monocle business. This income has not been able to push
foreword the status of their lives compared to age of enterprise. However, 95% of the
interviewees have responded that there is a change though the change is gradual. May be,
that the change is gradual may not be only because the profit is low, but also because the
use of the income is inappropriate. However, 33% were capable of sending children to
school, 27% of them, their working capital showed a rising trend since commencement of
business 18% of them have constructed dwelling house by the income generated from
business and 17% were able to furnish their house with necessary furniture (Table 8)




                    TABLE 8- CHANGE IN LIFE STANDARD
                                                  you
                                           have other
Change in




                                           means of
standard




                                           income
life




                                           Do




                                                                         Zones
1*     2*           3*          4*         YES                NO
46     39           21          24         27                 102        N/Gondar
18     18           16          18         16                 63         W/Gojam
20     18           17          15         9                  46         E/Gojam
20     12           4           5          9                  43         S/Wollo
24     18           12          15         14                 61         N/Shoa
128    105          70          67         75                 315        Total
33%    27%          18%         17%        (19%)              (81%)


*     1. I was capable of sending children to school
      2. My working capital showed a rising trend since commencement of business.
      3. I have constructed dwelling house by the income generated from my business
      4. I have furnished my house with necessary furniture




                                            49
3.2.TRAINING NEED INDICATORS
Having said so much and proving continuity of business, it is now important and proper
to ask the question „Is there a real training need?‟ and we will dwell upon the answer.


There are several sources of training needs and here we shall talk of needs, which can be
satisfied with training courses. These are: (1) obsolescence (2). Non-existence of prior
business training (3). Expectations and. (4) task analysis results



3.2.1 OBSOLESCENCE
Let us look at one of the sect oral compositions of the data source, service sector, with
particular reference to hotels' group. Over 30% of hotels group are, nowadays,
complaining of market problems (Table 6). The owner /operators do not know or do not
bother to know (in obstinacy) the cause of the problem, why their clients go to other
hotels. Some rooms of the hotels, if not all, are dirty, full of flees; reception is not fast;
rooms are not so comfortable to accommodate tourists, whilst others (particularly new
hotels to which the clients of others go) are furnished with private showers, TVS,
Telephones etc. The fact is that hotel service rendering style today has improved much
more than before. The way the problematic group gives services is traditional and
obsolete. Here is what a lady owner of a hotel said:”Look, it is me in this town of Debre-
Markos who opened a hotel for the first time. But you know all of my clients do not come
more often now than before. I did not know what offense did I do with them. I cook, but
due to loss of market it stays for long and expires…"Phrases like 'I did not know, they do
not come to my…'have many implications which the owner could not understand. In
most cases, traditionality is the characteristic not only of hotels group but also of almost
all enterprises. 79% of the entrepreneurs interviewed have started their businesses by way
of imitation. When business is handed over from a deceased family, it was known from
the survey that it was managed by a simple continuation of past practices. Managing
skills of decedents was at risk. Even consultancy accounts for only 3% (Table 9)

Micro and Small operators might have known that obsolete and traditional way of
service/production system does take them nowhere. But '' … Traders tend to stick to
known trade routes over time and to rely on existing relationships between buyers and
sellers instead of actively searching for and exploiting newly arising trading
opportunities.'' 1 The underlying problem is therefore, '' A major difficulty with us now
and destined to increase is manager obsolescence. The major cause is a manager's failure
to recognize that pre-employment education and skills will not serve through the entire
work life without periodic updating.''2

___________
1
    Scott Simons, Public and private trading in Ethiopia: Liberalization of markets,
    Phase II report, January 1993, p., 4.
2
    Terry, George G. Principles of management, 8th edition, AITBS, Krishna Nagar, 1991, pp 554-555.




                                                                  50
      3.2.2 NON-EXISTENCE OF PRIOR BUSINESS TRAINING

      Businesses, which have been started on consultancy basis, account for only 3%, while
      apprenticeship (paid and unpaid) together that accounted for 10%. 8% said that they have
      had formal education. It is most probably businessmen who operate pharmacies, clinics
      and some of the housing and office furniture producers who have this training (formal
      education). Imitation has worked, it accounts for 79%. Only 10.5% of the respondents
      have relevant training to their enterprises in which they are working now. The rest of
      them (89.5%) started business without training taken before, i.e., at no reliable
      managerial skills (Look at table 9)




                 TABLE 9. INDICATORS OF OBSOLESCENCE

                                                                         Have    you     ever
                    EXPERIENCE                          Apprentice       taken a training       Do you-
No.                                                                                             Need now        Remark
       Zones                     Formal      Consulta
                    Imitation    education   ncy        Free    Paid     Yes        No          Yes       No
1      N/Gondar     106          13          3          4       2        5          123         111       17
2      W/Gojam      54           7           3          6       8        3          75          73        5
3      E/Gojam      45           4            -         3       3        13         42          50        5
4      S/Wollo      46           1           2          1       5        1          54          47        8
5      N/Shoa       55           7           5          2       5        19         55          66        8
       Total        306          32          13         16      23       41         349         347       43
       %            79%          8%          3%         4%      6%       10.5%      89.5%       89%       11%


      Source: - Survey result




                                                  51
     3.2.3 EXPECTATIONS
     A key indicator of training needs is expectations. The assumption is that
     operators/owners seem to want to fill a gap that existed in their day- to- day operations.
     That is, they tell what is faced and perceived as constraint and the expectation of filling it
     by doing something. Owners/operators were asked as to what they would expect from
     trainings if they were given the chance to take one. (1) 71% said they expect
     improvement of their businesses and technical capacity from the training (2) More than
     60% of them has responded they expect operative knowledge of accounting and
     bookkeeping. This means that, respectively, there are 29% and 40% expectations to be
     filled after taking the training required (Table 10)


     On a first question owners/operators told that they hold accounting book. But if you
     further crosscheck by asking them as to how much do they earn annually, either they hide
     you information or they tell you they do not know exactly. Hence, you come to know
     they don't exercise accounting work.


     Expectations are also expressed in the following manner. For example, ready made cloth
     sellers want to know what a garment is made with, the level of wash ability, ironing,
     color fading, bleaching, creasing etc to give information to their clients.
     Table 10-EXPECTATIONS

                                                          Z O N E S                                        Total
No.     Expectations                                      N/Gondar W/Gojam   E/Gojam    S/Wollo   N/Shoa   NO %
1.      Training may teach about modern
        Entrepreneurship.                                 75       33        21         37        44       210   54

2.      Training may teach about
        Competition in a free market economy              76       37        18         40        43       214   55

3.      Training may teach about
        Improvement of business and technical capacity    77       64        46         42        50       278   71

4.      Training may teach about
        Business planning                                 44       62        45         31        39       221   57

5.      Training may teach about
        Quality and pricing                               69       37        21         31        32       190   49

6.      Training may teach about
        Accounting and bookkeeping                        73       65        45         37        39       259   66




                                                         52
3.2.4- TASK ANALYSIS – OVER TWO DOZENS OF INABILITIES.
The type of training need, the training need apart from business management, varies with
sect oral engagement (occupation). Occupation/task analysis is a mirror through which
we reflect the deficiency those operators /owners are suffering from. Therefore, we
examine another possible indicator of training needs, task analysis. The use of task
analysis is to distinguish between those deficiencies, which can be remedied by training
(and hence is a source and indicator of training needs). In the task analysis, deficiencies
in modern business management and entrepreneurship, efficient and effective systems of
production of goods and services, etc, owners/operators suffer are singled out. Studies
made in this respect show us that marketing and management activities together
accounted for less than 15%1 of the time spent by entrepreneurs. They spend much of
their time waiting for markets to come to their shops (keeping the shops). More detailed
studies could indicate that managerial skills of owners/operators are not at a satisfactory
level.

In this survey, owners/operators explained activities, which they ever found constraints
throughout the lifetime of the enterprises. Over 83% of the constraints are found to be
(1) the inability to account for incomes and expenses (2) the inability to calculate profit
and loss, and (3) the inability to use accounting records (and books)


These inabilities are regional problems. Their degree of intensity varies from 0.005%(
caused by use of family labor) to as high as 99%(caused by the inability to know profit
and loss). The most difficult operation in all firms is the problem arising from accounting
system. Market problems hold average positions (52%). The technical problem aspect
goes as high as 41%. It arises from traditionality of system and machine. The rest
problems originate from lack of knowledge to improve system (method) of production or
service (Look at table 11 on page 21).




__________



                                            53
      1
       Liedholm,Carl and Mead Donald, Small-scale industries in developing
      countries: Empirical evidence and policy implications, MSU international
      development paper (no.9) 1987,pp. 29-32.
      Table 11         TASK ANALYSIS –OVER TWO –DOZENS OF INABILITIES


                                                                             Sampled zones
SN.   Constraints                                                            North    West   East    South   North
                                                                             Gondar Gojam    Gojam   Wollo   Shoa

      Business Management

1     Inability to make decision on trade opportunities                      14     12       5       17      19
2         Lack of trade information                                          65     52       43      51      30
3                                                                            4      3        9       11      14
      Problem to know the need of my customers
4                                                                            6      2        3       9       13
      Inability to assess profitable market
5                                                                            4      2        5       7       10
      Inability to know product /service/ needed by community
6                                                                            4      2        0       2       8
      Despondency
7                                                                            1       -       1       1       7
      Inability to give alternative solutions for a problem
8                                                                            102    76       48      72      45
      Inability to account for income /expense /
9                                                                            9      76       46      71      48
           ''    ''       ''     ''    '' profit/ loss
10                                                                           105    78       59      70      73
      Problem of basic accounting system
11                                                                           74     51       35      14      31
      Inability to set goals
12                                                                           61     40       27      7       15
        '' to achieve goals
13                                                                           63     47       35      20      32
      None existence of consulting firms
14                                                                           11     4        7       3       10
      Inability to negotiate price
15                                                                           13     21       15      7       13
      Constraints related to working premises
16                                                                           32     47       35      52      37
      Inability to come up with cause of market problem
17                                                                           6      8        7       2       6
      Sale of product for less than its production cost
18                                                                           3      3        2       3       11
      Inability of owner to promote product/service
19                                                                            -      -       -        -      2
      Use of family labor

      Technical/Vocational

1     Traditional Service /production system                                 16     45       31      36      32
2     Inability to know quality raw material/product.                        7      11       14      14      4
3     Lack of machinery know how                                             2      10       12      13      11
4     Inability to produce quality goods and services from local and cheap
      materials.                                                             2      9        13      10      13
5     Lack of designing new product /service line                            12     12       14      7       15
6     Lack of technical/vocational skills and knowledge.                     3      4        9       15      10

      Others

1     Infrastructure problems                                                9      2        1       5       2
2     Lack of financial leverage                                             86     58       39      62      42
3     Shortage of raw material                                               7      5        6       7       8
4     Cultural impact                                                        5      3        2       3       6
      Source: - Survey Result




                                                          54
3.2.4.1.Small Scale Industries
Included in this category are oil mills, grain and flour mills, bakeries and cake, housing
and office furniture manufacturers, garages, tailoring, knitting, metal works, wood works,
wielding, electric stove making, hollow blocks production etc.


3.2.4.1.1 Activities
(1) Receive orders from clients       (2) Set price (of buying raw material and selling
produce) (3) Design      (4) produce (using traditional tools and skills) (5) Guess on profit
and loss (on the basis of purchase price alone)     (6) Keep stock of production and raw
material (7) Deliver (sell) (8) safety.


3.2.4.1.2   Deficiency
(1) They don‟t keep records of these activities (2) They lack ability to select quality raw
material and production    (3) they lack designing of new product /service system (line)
(4) They don't negotiate on prices based on supply and demand            (5) They don't do
maintenance and operation     (6) They don't know the use of cost accounting. (7) They
don't keep the orders of clients in mind, i.e., they see the work order from the point of
view of their benefit. (8) They don't take safety measures in the proper way        (9) they
don't take the necessary care for stock preservation and arrangement. (10) They don't
care for wastage on the process of production or service. (11) They don't recycle or use
by-products to produce other goods.




                                             55
3.2.4.2. Handicrafts
Handicrafts mostly use crude manual instruments and raw material. These are
blacksmiths, basketry, mat making, wancha sera, cultural shoe making and maintenance,
dying, Agelgel-sira, cultural pickling work, figurites, pottery, cultural weaving,
embroidery etc.


3.2.4.2.1. Activities
   1. They receive no orders, or do not study market (demand)
   2. They design and produce
   3. They go to market to sell


3.2.4.2.2 Deficiency
   (1) They don't design new style (they repeat what has been done in the past)
   (2) They always use the same tool (they don't improve produce or system)
   (3) They don't keep account of all selling and buying.
   (4) Some members of the group, pottery, weaving etc. don't use better production
       method. Weaving, for example, lacks density, color combination, raw material
       selection etc.
   (5) They don't bother about market study, type of product demanded more etc.
   (6) They don't know how much unit of raw material is required for one unit of
       product.
   (7) They don't use accurate measuring unit.


3.2.4.3 Service Rendering Sector
3.2.4.3.1. Duties
       1.Reception (clients and guests)
       2.Rent (sell) service
       3.Receive money




                                           56
3.2.4.3.2. Deficiency
    1. They lack attitude
    2. They lack vocation, quality, etc.
    3. They don't keep account of their daily activities and progress.
    4. They spend money on unplanned manner (defalcation)


    3.2.4.4 . Wholesale and Retail Trades
    3.2.4.4.1. Duties
    1. They keep stock
    2. They go to market with their goods
    3. They fix price
    4. They buy and sell


3.2.4.4.2. Deficiency
1.They use their goods for their personal consumption and don't do any accounting work
of this.
2.They don't keep record of buying and selling
3.They don't know quality, don't negotiate on price:
4.They don't know characteristics of their goods
5.They don't explain the characteristics of their goods
6.They don't orderly arrange goods to attract sight
7.Discounts are deceptive (to some degree, not all)
8.They guess they have made profits they don't know exactly
9.They don't save from profits
10.They don‟t plan short/long range business expansion (they lack vision)




                                            57
3.2.4.5      Common Deficiencies
3.2.4.5.1. Knowledge and Skill
    1. They don't keep record books
    2. They don‟t know their monthly, biannual or annual income, expenses, profits or
          losses.
    3. They don't plan business expansion on a systematic basis
    4. They don't save
    5. They don't do market research etc.
    6. They don't use modern production machine.
    7. Products and Services lack quality


3.2.4.5.2. Attitude
    Even though, some of them have a motto "Our clients are our kings'',
    1. Some don't smile when they see their clients
    2. Some lack politeness, patience
    3. Some don't respond patiently to questions raised by clients.
    4. Some of them insult
    5. Some of them are over ambitious.
    6. They don't save and hence lack of vision appears.




    _________
*   When goods (products) lack quality, they become (change to) an inferior good. This in turn has a side effect. That is, the demand

    for inferior goods declines directly with the increase in income of consumers. And that is why people prefer goods produced
    abroad ''Yewch eqa '' to country ones.




                                                               58
3.2.5. EXTENT AND TYPE OF NEED FOR TRAINING
In this study it was found that 11% of the interviewees rejected the offer for training
opportunity for various reasons. However, if you further question them as to why they do
not want to participate in trainings, you would not get any one of them answering that he
has all knowledge required to perform in the way the markets demand.


Another fact was clear from the above statements, which is the number of entrepreneurs
who want the training was 89% of the interviewees. They want training focusing on
modern management and entrepreneurship. There are few respondents who want the
training for a second time. The entrepreneurs who want the vocational and technical
trainings are 55% of them.


    TABLE 12. TRAINING NEED SHARE OF THE ZONE COVERED BY
                                        THE SURVEY
                          Management                Vocational OR
                             Training               Technical training         Remark
No.   Zones                               %                        %
1     North Gondar        111             87        60             28
2     West Gojam          73              94        45             21
3     East Gojam          49              91        35             16
4     South Wollo         48              87        35             16
5     North Shoa          66              89        39             18
                          347             89%       214            55%
       Source: - survey result




                                               59
3.2.5.1   Type and extent of training demand by age and education


3.2.5.1.1 Vocational/Technical training demand
Of the total number who demands the vocational and technical training, whose
educational background is over grade 9, are 45%. The age groups considered to be
favorable (49years old and below) to the training are also 78%, which means that this
training has 44% fertile ground, shaded part of table 13 below.


The type of training which relates to their occupations and that operators would like to
take is shown on page 27 (tables 14 and 14.1)


Table 13- Vocational and technical training demand (by age and education)
Age/edu. Reading/ 1---4            5-8           9-12     12+2     >12+3       Total
           Writing
18-25      4            1          9             30       0        0           44
26-33      5            0          12            27       0        2           46
34-41      7            1          9             20       4        0           41
42-49      12           1          10            12       0        0           35
50-57      16           2          5             1        0        0           24
58-64      8            2          2             0        0        0           12
65+        8            0          3             1        0        0           12
Total      60           7          50            91       4        2           214


Source: survey result




                                            60
61
Table 14.    Type of Trade Activities, which needs Voc & Tech Training


Serial                       No.       Of
No.      List of Shops       Enter           Need of Training
                             -prises
1        Bakery and Cake     9               Baking, operation & maintenance
2        Boutiques           14              Textile technology, garment techniques
3        Flour mills         2               Operation & maintenance
4        Grain mills         6               Operation & maintenance
5        Handicrafts         39              Various technical trainings
6        Hides and Skins     2               Storage and handling
7        Hollow block        4               Production and safety
8        Wood Work           10              Cutting, designing, safety
9        Knitting            3               Knitting, operation and maintenance
10       Fruits& Vegetables 1                Storage and handling
11       Washing& Ironing    1               Washing, ironing, characteristics of
                                             clothes
12       Micro lean user     5               Different (as per their jobs)
13       Pepper and Spice    1               Preparation and storage
14       Audio Video         1               Advanced techniques
15       Photograph          1               Advanced techniques
16       Laundry             2               Operation & maintenance
17       Fishery             1               Fish processing
18       Honey and Butter    6               Storage and handling
19       Hotels group        35              Food preparation
20       Maintenance         4               Operation & maintenance
         Shops
21       Metal Works         10              Cutting, measuring etc
22       Oil mills           5               Operation & maintenance
23       Shoe and Leather    14              Shoe and leather technology
24       Tailoring           12              Vocational
25       Beauty Salon        2               Advanced techniques, fashion
                                        62
Serial
No.       List of Shops     No.       Of Need of Training
                            Enter
                            Praises
26        Coffee grinding   1             Operation & maintenance
27        Supper Market     3             Storage and handling
28        Butchery          2             Meat processing
29        Food Stuff        8             Food preparation
30        Gold Smith        1             Techniques of mine selection, making
31        Clinic            1             Clinical
32        Pharmacy          2             Pharmaceutical
33        Barbery           5             Modern barber
34        Figurites         1             Designing and making


         Source: Survey result




                                         63
3.2.5.1.2. Management training demand by age and education
Pertaining to the demand for training in modern management and entrepreneurship,
whose age is 49 and below are 73% and the educational background of these operators
(grades 9 and above) are 46%, which means that this training has a 51% fertile ground,
shaded part of table 15 below.


Table 15-Management training demand by age and education
Age/and      Reading/ 1---4        5-8           9-12    12+2        >12+3      Total
Edu.         Writing
18-25        8         1           11            49      1           0          70
26-33        8         1           16            62      1           3          91
34-41        9         1           20            35      5           2          71
42-49        18        7           9             14      2           3          53
50-57        21        4           8             2       0           0          35
58-64        10        1           2             0       0           0          13
65+          11        0           2             1       0           0          14
Total        85        15          67            163     9           8          347
   Source: Survey result


3.2.5.2. Time preference and training fee
The time preference by entrepreneurs tells us that time schedule of training institutions
should be:
   1. Take into account time preference of trainees
   2. Select days of the week those with less market (are not market days). From this
        also one can come to conclude that to base training institution very near to the
        entrepreneur. Most respondents have assistants in their shops. The assistant may
        be a distant relative or an employee. Even though the family assistance was
        plenty, most owners don't want to spend minutes out side their shops.


                                            64
One reason for not responding positively to wards the APOS is incredibility to training.
They take the training is a profit making work which entails cash outlay. And that is why
most of them responded negatively to the question of training fee too.


The other reason may be lack of understanding of the essence of training. They believed
that it helps to improve business but they expect the effect so soon. Anyways more than
average respondents have agreed with the time scheduled by the Agency, i.e. APOS-as
per the office schedule.


The third reason for the preference lies in the fact that frequency of trade declines during
the months preferred. Entrepreneurs spend much of this spare time, visiting relatives etc.
They prefer this time to invest in the training programs. (Look at tables 16 and 17)


Table 16 - Time Preference
 SN.    Zone                     APOS                         No time, other schedule.
 1.     North Gondar             73            56%            55              43%
 2.     West Gojam               44            56%            34              44%
 3.     East Gojam               29            53%            26              47%
 4.     South Wollo              34            61%            21              38%
 5.     North Shoa               39            53%            35              47%
                                 219           56%            171             94%


       Source: - Survey result


The months preferred by entrepreneurs as suitable time for trainings are, as shown in the
following table, July, August, October and November, June, February and May. 58 %of
the year suits them. Schedules, which deviate from this, may be at risk. (Table 17)




                                            65
     Table 17 -      Preferred Months (Other Schedules preferred)
SN. Zone                        Sept      Oct       Nov.        Dec.      Jan.   Feb.      M.     A       May        Jun        July   Aug.

1.      North Gondar            1         3         1           1         -      2            -   -       -          -          9      9
2.      West Gojam              3         8         11          2         1      9         4      3       2          5          4      3
3.      East Gojam              5         5         3           1         1      2         1      1       4          1          2      2
4.      South Wollo             1         2         4            -        1      1            -   -       1          1          2      1
5.      North Shoa              1         2         1            -        4      -            -   1       5          9          9      9
        Total                   11        20        20          4         7      14        5      5       12         16         26     24


        Source: - Survey result


     With respect to the fee for training, it would be hopeless to think at least in the near
     future that the entrepreneurs would pay and get training unless the training courses are
     made so smart that attract them in like manner as the agricultural extension package
     attracted farmers because 94% of the respondents said that they would not pay for
     nothing. (Table 18)


                                        TABLE 18. TRAINING FEE
                     N/Gondar       W/Gojam         E/Gojam          S/Wollo     N/Shoa
      Pay Training        %                %            %                 %               %       Total       *          Remark
      Fee

      NO.            121   95       72        92%   52     95%       53   96%    67       89%     365         94%
      YES            7     5        6         8%    3      5%        2    4%     8        11%     26          6%




      Total          128            78              55               55          74               390         100%       *Regional share of
                                                                                                                         the zone



                  Source: - Survey result




                                                         66
PART FOUR

4.1. CONCLUSION


The interviewees in all the five zones complain of a multitude of problems, which have
hitherto been bottlenecks to the improvement of their businesses. These complaints
(remarks) are mainly categorized into four sources, as per this survey in the following
way: Lack of training, information, capital, and trade premises.


Many of the NGOs who have made assessment of the problems of MSEs have ignored
micro-entrepreneurs as an agenda of training while most of the problems facing the
entrepreneurs are in one way or another interlinked with lack of training. Training is the
father of all problems. The sons are taxation based on guess, capital-weakening effect of
taxation, and hence lack of capital, inability to save and use of accounting system. They
grow rapidly to aggravate problems related to good entrepreneurship.


However, training and micro enterprises cannot be treated separately, simply because
micro and small operators work on the principles underlying in marketing. Businessmen
had handed over firms from a family1, probably when they were not ready to perform
accordingly, in which time micro-operators want markets come to their shops on their
feet rather than micro operators search for outlets to their services and produces. They set
prices in an orthodox manner, which does not follow demand and supply rules. This
should have been understood as lack of knowledge, skill and attitude.


Here lies the real problem that everybody is unable to identify keeping in mind the fact
that most of them acquire skills informally2 (i.e., on the job…) Training aspect of
donation is left unmentioned3 due to various reasons as if it has no value to the
developmental efforts of MSEs. The reasons may be the attitude of researchers, or the




                                            67
multitude of problems etc. But lack of training aspect of the problem has greater share of
the bottleneck faced by entrepreneurs.

Most micro and small operators prefer staying in the shops waiting for the solution for
their market problems to come from somewhere to going to training sessions and learn
principles of marketing. Some think that training is a waste of time, money, and
manpower. Some others think it to be a panacea, a magic answer for all problems. Still
some others think that training effects will show up so soon as they expect. '' How dare I
pay before I see the importance … '' was the answer many small traders gave. That is
why training is said to be surprisingly little understood1 by small traders and researchers
as well.


The total number of micro and small enterprises in the ANRS are said to be over 150000.
A projection of the whole based on the sample survey result shows us that 89% of them
want to take training in modern management and entrepreneurship. At the present
capacity level of the Agency it takes 2670 rounds (50 trainees get trained by a team
composition of four trainers in one round) to give them one round course in CEFE. One
round takes 8 days. Therefore, 2670 rounds take 21354 days. When this figure is
converted into a year long, it is 58 years. Again, based on the same representation,
technical or vocational trainings demand also 36 years.


ReMSEDA observed the following as an initial step for further investigation by
stakeholders and for package training.
            One hollow block producer‟s cooperative in North Shoa waiting for
               opportunities yet to come.
            One-household and office furniture producers' association is in its infancy
               in North Gondar.
            Tailoring associations interviewed were, one from North Gondar and
               another from North Shoa, but they don't seem to be alive. We could not
               talk with members because of disappearance in office (work place)




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                        There was one ex-cooperative in North Shoa (Debre-sina) of a weaving
                                 association (now defunct) ex-chairman has informed us their desire to
                                 reestablishment association. They want government's help.
                        One which produces leather products from by-products of tanneries – in
                                 Dessie - street children.
                        A crafts center in Gonder (Ploughshare Women's Craft Center) exists. But
                                 it is quite outsmarting to our capacity. It has changed to a local NGo,
                                 training center for (1) pottery, (2) production of vegetables, and (3) a
                                 future plan to weaving (the weaving project is at its inception)
                        Knitting in North Shoa – with two members still functions
                        Assab dislodged saving and credit Association, Haik (Dessie)
                        Beauty salon owners/operators in Dessie.
                        One cooperative formed as Share Company in South Wollo. It is a micro-
                                 enterprise engaged in grain trade and sheep rearing.




    __________________________

 1
      USAID, Micro enterprise Development, policy paper, DC 20523,p.36.
1 USAID, Micro enterprise Development Policy paper, Dc 20523, p3
2
 Care Canada and Care International Ethiopia, Paper contributed to business development action plan, World Bank, June 4,1994
 3
     Lecture note, TOT, EMI, 1993 E.C




                                                              69
4.2. Concluding Remarks
The tremendous implication of training to the development of the Micro and Small
Enterprises is the fact that:
1. It helps them to be more profitable through courses included in CEFE. This course
        improves their managerial skills in the day-to-day operation of the enterprises.
2. It teaches them accounting and hence force them to follow the principles, i.e., separate
        them from the organization. This in turn has many implications: calculation of
        depreciation, saving etc.
3. It helps them to work in cooperatives. As the future belongs to be organized,
        cooperatives do help operators to get access to credit, information, trade premises,
        etc.


It is possible, from the facts gathered, to conclude that the training has a good deal of
fertile ground, simply because,
1. The type of business assessed has contiguity
                The age of firms is over ten years (75 % of the total.)
                Firms are broadly based on the supply of consumption goods (93 % of
                  clients are consumers)
                Owners said that they would continue with their present businesses by
                  ways of expansion and/or diversification ratio is 84 % and 16 %
                  respectively from the total sample.
2. The type of business has brought some change of life to its holders and it was
        profitable.
3. Most of the owners 46 % have an educational background of grades 9-12 and most of
        them are between the ages 18-49(77%), which is productive and assumed to be at
        favorable age for the training




                                               70
These conditions encourage the training conductor to pursue its goals provided that there
is a demand for a particular type of training. Therefore, the next question is “ Is there a
real demand for training? And if the answer is yes, what type of training?”


It has become clearer from the interpretation of the data gathered that:
    Most traders are not guided by personal characteristics of an entrepreneur (PCE).
    The task analysis identifies deficiencies in both the technical and managerial
       skills of owners in the day-to-day operations of the business.
    There are no traders who have started their businesses on the basis of principles
       underlying in marketing.
    Almost none of them took training before or after holding the particular occupation.
    Expectations of traders tell us something unfilled
    Statements made pertaining to constraints tell what is not performed in the
       operation of the businesses at hand. None of them knew their annual income. The
       degree of non-performance varies from o.oo5% to almost 99%(Table 11).
    These all indicate that there is an urging need for training. 89 % of the owners
       interviewed responded that they believe training would help them improve their
       businesses if they get the chance.


Moreover, there are two factors, which determine the need for a particular training. These
are the type of trade and the discrepancy observed in the job analysis. The type of trade
determines the training to be either technical or managerial. The discrepancy determines
the deficiency to be remedied is knowledge, skill or attitude.

In generic terms, three things are clear: (1) traders do move on old and obsolete
relationship (system) (2) they don't make good decisions on trade opportunities (3) they
don't do market assessment (they imitate) (4) There is no production of quality goods and
services from cheaper materials available (creative work), and introduction to a new
appropriate technology. The weak point lies in here.




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There are 55 % of interviewees who showed positive attitude towards the training but
only if the technical or vocational training relates to their respective occupations (Table
14) and 89% of the sample size that wanted to take the management training.




4.3. RECOMMENDATIONS

The following are recommended to be implemented by each stakeholder who are engaged on
promotion & supporting activities of MSE.

1. ReMSEDA

    Develop curriculum that is capable of bringing about tangible result. This can be
       achieved in cooperation with higher education institutions in the region. Target
       population should evaluate the already existing training materials intensively so as
       to prove the comprehensiveness. The training material/course inculcates
       communication and the use of exchange of information in business.

    Facilitate the development of training centers in the region. The training centers
       may be either privately owned or owned by the Agency. Privately owned centers
       work in cooperation with the Agency. They may be centers established by trainers
       certified by the Agency. This is one of the provisions stipulated in the
       proclamation for the establishment of the Agency. If the centers are said to be
       owned by the Agency, the Agency needs certified trainer staff. The trainers in
       addition to MSE operators should give training to trainers. By doing so, the
       Agency will have many trainers. This in turn facilitates MSE operators‟ access to
       training. At any rate, however, the Agency is required to intensively work on
       capacity building of trainers.

    Encourage individual trainers and support them to develop to a training center.
       The trainings which are being conducted must be recorded by videos so as to
       evaluate the method the trainers are using, the style of the training (check from



                                            72
       the principles of learning/ teaching), the efficiency of audio visual aids used,
       personality of trainers, reactions of trainees in class etc. So that strong trainers
       could be licensed to work privately. At the same time, the Agency should develop
       standard to measure the strengths of trainers and adopt certification criteria.

    Encourage trainees who have put the training into practices is also one method to
       be used to encourage application of training courses by target population. The
       Agency has, therefore, to develop an incentive scheme to both the trainer and
       trainee.

    Formulate selection (prioritization) criteria of trainees because the demand for
       training has become beyond the capacity and can never be attained even in the
       coming 50-60 years by the Agency alone. The selection (prioritization) criteria
       may be according to the business development strategy.
    Formulate a policy, which facilitates the above recommendations.


2. Other Stakeholders
The stakeholders in the micro and small enterprises sector are the micro and small
enterprises operators themselves, chambers of commerce, women's affairs, the Bureau of
Trade, Industry and Urban and works development, and other local and foreign NGOs
should work in cooperation in order to develop the share of the sector contribution in the
economic development of the region & the country. Availing finance and credit,
computers, televisions, videos, overhead projectors, white boards, which are necessary to
establish training centers are expected from donors.


2.1. Micro and small enterprise operators, work in cooperatives, avoid individualism.


2.2. Chamber of commerce-contribute finance, and other training materials. Identify
       Traders who have put the training into practice and incentive.




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2.3. Office of women’s affairs- Much is expected from this office. Budget, and materials
like computers and accessories and incentive schemes for members practicing the
training.


2.4. Bureau of Trade Industry and Urban and works development- Budget, technical
        Assistance and skilled manpower and training materials contribution is expected,
        Office allocation to the Agency‟s branches


2.5. Amhara development association -help training need assessment of clients (type
and extent of the demand for training) and the effort to obtain profile of clients such as
detailed information on education, age, address and type of training they need. Financial
assistance (fund raising) for projects proposed at the sites where training centers are to be
established. Joint use of established training centers, training material, and other
facilities, Training of trainers, development of training material and financial assistance,
furnishing of training centers of jointly established or formerly established by ADA in the
preparation of the centers for joint use.


2.6. Bureau of Education -Teach students at school the formation and use of
cooperatives, work jointly with the Agency to develop curriculum of training to the
students /micro and small enterprises operators in vocational, technical and
entrepreneurship in addition to the vocational and technical education.


2.7. Bureau of cooperatives development -Assist technically in organizing micro and
small enterprises and handicrafts & legalize the existing ones.


2.8. Municipalities -Allocation of space to MSEs operators paying special attention to
        Cooperatives.


2.9. Other NGOs (local or others)- Technical assistance, project appraisal and fund
raising, training material development, capacity building of staff, assistance in the form
of computers, Vehicles, OHPs, Videos and cameras, etc.



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REFERENCES
1.ANRS-ReMSEDA, Draft Strategy, May 2001.
2.ANRS – ReMSEDA, unpublished data, 1993/94 E.C
3.Bureau of Industry & Handicrafts, Annual Report, 1985 E.C
4.Bureau of Trade and Industry, Statistical Bulletin, No. IV, Dec. 1998
5.Care Canada and Care International Ethiopia, Micro enterprises Assessment Paper
       Contributed to Business Development Action Plan, World Bank, June 4,1994.
6. Chuta, Enyinna and Liedholm, Carl, Rural non-farm Employment: A review of the
       state of the Art, MSU Rural Development Paper (No.9) 1979
7. EMI, TOT Course, Unpublished Source, 1993 E.C.
8. Jones, Derek C: The nature and Performance of Private firms in Bulgaria, IRIS
       working paper (no. 99), Feb. 1994.
9.Liedholm, Carl and Mead, Donald, Small Scale Industries in Developing Countries:
Empirical Evidence and Policy Implications, MSU international Development paper,
       no., 9, 1987.
10.Simons, Scott, Public and Private Trading in Ethiopia: Liberalization of Markets,
       Phase II Report, and January 1993
11.Terry, George G., Principles of Management, 8th edition, AITBS, Krishna Nagar,
       1991
12.USAID, Micro enterprise Development Policy Paper, Dc 20 523.




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