Growth of Small and Medium Enterprises in Addis Ababa Administration In The Case Of Kolfe Keranyo Sub City

Abstract

Small and Medium Enterprises (SMEs) are a vital component of the economies in both developed and developing countries. Beyond their economic significance, SMEs are a major focus for policymakers, economists, and various other stakeholders. This study aims to address the gap in understanding the SME sector's key challenges. Specifically, the study examines the factors affecting the growth of SMEs in the Kolfe Keranyo sub-city of the Addis Ababa Administration, focusing on the trade, urban agriculture, manufacturing, service, and construction sectors. Using a combination of quantitative and qualitative approaches, the researchers collected data through a questionnaire distributed via proportional stratified sampling. The analysis, conducted using SPSS software, revealed several major factors hindering the growth of SMEs in the region. These include a lack of access to capital, limited marketing opportunities, poor infrastructure, inadequate human skills, and deficient managerial capabilities. The findings indicate that access to capital, availability of suitable working premises, supportive government policies, access to markets, and infrastructure development are all crucial determinants of SME success and growth By identifying these critical factors, the study provides valuable insights that can inform policymaking and support initiatives to strengthen the SME sector in the Addis Ababa region. Addressing the barriers small and medium enterprises face is essential for unleashing their full potential as engines of economic development and job creation in both developed and developing economies.