THE CONTRIBUTION OF MICRO AND SMALL ENTERPRISE IN

POVERTY REDUCTION (IN CASE OF ROBE TOWN)

A REASREACH A PROPOSAL PAPER SUBMITTED TO DEPARTEMENT OF

MANAGEMENT PARTIAL FUILLMENT FOR THE REQUIREMENT OF BACHELOR
ARTS (BA) DEGREE IN MANGEMENT

PREPARED BY: - ALEMITU FIKADU

UNDER THE GUIDANCE OF: DEJENE T.

MADDA WALABU UNIVERSITY

SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

MARCH, 2024

BALE ROBE, ETHIOPIA

i
 LIST OF ACRONYMS

CSA Central Statistical Authority

UNIDO United Nations Industrial Development
FMSEDA Federal Micro and Small Scale Enterprise
Development Agency

MSES Micro and Small Scale Enterprises

MOTI Ministry of Trade and Industry

RMSEDA Regional Micro and Small Enterprise Development

Agency

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Contents
LIST OF ACRONYMS ............................................................................................................................... I

Abstract …………………….………………………………………………………………………………………………………………..............1

List of tables ………………………………….…………………………………………………………………………………………….............2

CHAPTER ONE ........................................................................................................................................... 4

Introduction ................................................................................................................................................... 4

1.1. Background of the study ............................................................................................................... 4

1.2. Statement of the problem .............................................................................................................. 5

1.3 Research questions ....................................................................................................................... 7

1.4 Objectives of the study.................................................................................................................. 7

1.4.1 General objectives of the study ............................................................................................. 7

1.4.2 Specific objectives of the study ............................................................................................ 8

1.5 Significance of the study ............................................................................................................... 8

1.6 Scope of the study ......................................................................................................................... 8

1.7 Limitation of the study ............................................................................................................ 8

1.8 Organization of the study .............................................................................................................. 9

CHAPTER TWO ........................................................................................................................................ 10

2. Review of related literature ..................................................................................................................... 10

2.1. The meaning of poverty and its measurement ................................................................................. 10

2.2. Concept and definition of small enterprises ..................................................................................... 11

2.3. Characteristics of MSES .................................................................................................................. 12

2.4. Types of MSES ................................................................................................................................ 13

2.5. The role of MSES in reducing poverty ............................................................................................ 14

2.6. The state of poverty in small and micro business in Ethiopia.......................................................... 15

2.7. Problems and constraints of MSES Development in Ethiopia......................................................... 16

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 2.8. Prospects for MSES Development in Ethiopia ................................................................................ 20

CHAPTER 3 ............................................................................................................................................... 22

METHODOLOGY OF THE STUDY ........................................................................................................ 22

3.1 Research Design................................................................................................................................ 22

3.2. Source and method of data collection .............................................................................................. 22

3. 3. method of Sampling and Target population .................................................................................... 24

Chapter Four ............................................................................................................................................... 21

4. Cost ..................................................................................................................................................... 21

4.1 Time budget ............................................................................................................................... 21

4.2 Budget Break down .................................................................................................................. 22

Reference ................................................................................................................................................... 23

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 Abstract

The major objective of this study was to investigate the contribution of Micro and Small

Enterprises (MSEs) to reduce poverty in Robe town. In addition to this, the study tried to

discuss the factors that influence the development of MSEs in the city. Scope of the study

was delimited to describing the MSEs ’contribution in reducing poverty in Robe town only.

The study is descriptive type and for the sake of achieving the objectives of this study, both

primary and secondary sources of data were used. Mainly, the researcher used primary

sources of data. Of them, questionnaires were analyzed using statistical descriptive analysis.

The information collected through questionnaires from a sample of 44 MSEs and interview

with the MSEs Office. The respondent operators were selected using stratified sampling

techniques. Besides the interview, questions were analyzed and discussed qualitatively and

quantitatively. The study examined and identified the major contributions of MSE like

employment creation the problems facing them like technological, infrastructural, marketing

and financial problems. The study also discussed opportunities for MSEs development from

governments side. At the end, based on the analyzed data, the researcher forwarded

recommendations

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List of tables

Table 4.1:Age and sex structure of the respondents…………………….……....…18

Table 4.2: Educational background of therespondents……………………….…..19

Table 4.3: marital status and family size of there spondents…………………..………………20

Table 4.4 :Experience in managing their business……………………………………………..21

Table 4.5: Reason to start the business………………………………….………………… 22

Table 4.6: sources of finance……………………………………………………………….25

Table 4.7:respondants source of income ……………………………………...…………… ..26

Table 4.8:respondants initial and current capital ………………………………..………… ..26

Table 4.9:respondants initial and current number of employees ……………………………27

Table 4.10:working place related factors………………………………………………….28

Table 4.11: Technological factors………………………………………………………….29

Table 4.12: Infrastructural problems(factors) that influence the developments of MSESS...29

Table 4.13: marketing factors that affect the performance of MSESS……………………..30

Table 4.14: Financial factors that contribute for the expansion of MSESS…………...……..31

Table4.15:Improvement in income of respondents…………………....……………………31

Table4.16:housing condition……………………………..………………………………….32

Table 4.17:respondants animal and communication condition ……………….…………..…32

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Table 4.18:nutrition condition of respondents…………………………………………..…33

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 CHAPTER ONE

Introduction

1.1. Background of the study

It is widely accepted that MSES play vital role in socio economic development of a country

as a means for generating sustainable development and income. However, MSES play an

important role by providing the founding ground for medium and large scale enterprises and

in the process of contributing to the reduction of poverty. MSES make a significant

contribution to the socio-economic life of the country by way of supporting people to earn

money and make a contribution to family income and by supporting basic goods and services

for local consumption (FMSEDA, 2006:13).The aim of MSES development and the

provision of MSES services are to enable the entrepreneurs to take advantage of market

opportunities and improve the access to skill development opportunities that strength

entrepreneurial capabilities (UNIDO, 2002).

In general , the provision of MSES in the country is increasingly becoming more important

due to the fact that they use what the country possesses and less of what it lacks plus to that

their role in employment creation for the majority of peoples. Because of the potential of

MSES for economic development by creating market for local products and utilization of

local raw materials and

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 knowledge, more attention has been given to the sector. In the past, the importance of

MSES as a vehicle to address the challenges of unemployment, growth and poverty was

not properly acknowledged in Ethiopia. Now a days the government give emphasis and

began to pay due attention to the promotion and development of MSES(Lee water A. and

Shaw, 2008).

Ethiopia is one of the countries with this condition and relaying up on MSES help as an

engine to drive economic development, elimination of unemployment and poverty and the

failure of these business in Ethiopia indicates that they are in dire need of assistance. In1990,

the federal government of Ethiopia has developed a strategy for the development and

promotion of MSES. The primary objective of the strategy is creating suitable environment

for MSES, given such an enabling environment, it is expected that hundreds and thousands of

MSES will themselves be responsible for the operation, growth and progress of their

enterprises (MOTI, 1997).

1.2 Statement of the problem

The dynamic role of MSES in developing countries is as an engine through with the

growth objective of those countries can be achieved and recognized as a major source of

employment and income in a growing number of developing countries. Since 1990,

MSES undertake its pilot activities; one of its objectives is reduce poverty and stimulating

the Ethiopian economic growth giving priority to MSES.(MOTI, 1990).

The number and rate of development of MSES in Ethiopia is not growing as needed. This

could be attributed to several factors. The businesses environment in which MSES are

operating today in different considerable changes have taken place in the world economic

order during the past 2 and 3 decades. The growing intensity of global competition affects

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 the growth of MSES and developing economies. It is a great importance to understand the

factors, characteristics and patterns of the changes that are taking place in the domain of

MSES, combining with this a vision of how things might develop better in the future in

order to specify measures that might be done to help bring about the desire outcome.

Knowing an important part of this sorting out involves a better understanding of the

contribution (benefit) of MSES to reduce poverty and the growth process of taking place

among MSES (Mukras, 2003).

Despite MSEs are contributing a lot in changing people’s standard of living in Ethiopia,

the situation in Robe town has lack of organized and well-coordinated support systems

that cater for the sector, thus MSES operating in the area have been confronted by various

problems which are of structural and institutional in nature. To start with, lack of

infrastructure is the first and the most pressing problems facing small enterprises for

startup as well as survival of the business. Several MSES have contributed to reduce

poverty in Ethiopia over the past 2 and 3 decades. As it has been clearly explained above

there are numerous studies, reports and findings of different aspects of MSES

contribution according to bank and credit associations, non-governmental, such as GIZ

and Reach of change and the government organization are important actors in

entrepreneurship in Ethiopia. However, the contribution of these MSES in poverty

reduction has not been satisfactorily and comprehensively assessed and the contribution

of MSES in poverty reduction is not well addressed. So, the researcher believed that there

are little or not enough conceptual studies regarding to the contribution of MSES in Robe

town. Therefore, the aim of this study was to assess (investigate) the contribution of

MSES to reduce poverty in Robe [Link]

1.3 Research questions

The research will be answer the following questions:

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  What are the contributions of MSES to reduce poverty?

 What are the factors that influence the development of MSES in Robe

city?

 How MSES affect the economic development of Robe town?

 What are the institutional, financial, marketing, policies and environmental

related opportunities for MSES development?

1.4 Objectives of the study

1.4.1 General objectives of the study

The general objective of the study is to know and assess the contribution of Micro and

Small Scale Enterprises (MSES) to reduce poverty in Robe town.

1.4.2 Specific objectives of the study

 To investigate the contribution of MSES for economic development and to

reduce poverty

 To examine the factors that influence MSES on economic development.

 To identify the area of intervention for the improvement of MSES operation

in the study area.

 To identify the institutional, financial, marketing, policies and environmental

related opportunities for MSES development.

1.5 Significance of the study

This research will be useful for other researchers as an insight to think broadly and conduct

research on what is not included here. In addition to this, it can help government policy

makers of Robe town to take appropriate measure where it becomes necessary

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 1.6 Scope of the study
Geographically, the research will have conduct on Robe City, which is found in south east

Ethiopia in Oromia region. The study covers what role MSEs have in reducing poverty, what

are the factors influencing MSEs development in the city and the support given to them from

the government.

1.7 Limitation of the study

Like all research, this study had limitations. The sources of difficulties encountered in this

study were described as follows: Unwillingness of a few respondents to give sufficient

information, Another problem encountered in the study has to do with the operator’s

reluctance to cooperate due to suspicion that disclosing information may lead to negative

effect on their business.

1.8 Organization of the study

This study will be organized in to the following five (5) major chapters. The first chapter
introduced back ground of the study, specifies the objectives, scope and limitation and the
significance of the study. The second chapter presented the review of related literature. The
third chapter explained about the methodology of the research. Chapter four outlines data
presentation, analysis, and interpretation of the data. The remaining chapter five
summarizes, concludes and suggests some recommendations about the study.

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 CHAPTER TWO
2. Review of related literature
2.1. The meaning of poverty and its measurement
Poverty is a state or condition in which one lacks the financial resources and essentials for a
certain standard of living. Poverty can have diverse environmental, legal, social, economic,
and political causes and effects (Ending Poverty, United Nation Sep 2020)

A wealth of literature focuses on discussing the meaning of poverty and identifying the

most appropriate indicators which can be used to measure its magnitude on the national and

international levels. However, it is indicated that there is no optimal definition to describe

poverty, or a measurement technique to compare poverty across countries or among different

parts of a country (sirageld in, 2007).

Development studies specialized in poverty related issues indicate that at the beginning of

the 20 century. Poverty standard was based on estimates of the minimum level of nutritional

and food requirements. Extreme (absolute) poverty refers to the lack of income necessary to

satisfy basic food needs usually defined on the basis of minimum calorie requirements.

Human poverty refers to the lack of basic requirements to sustain basic human capabilities

such as: illiteracy, malnutrition, abbreviated life span poor maternal health illness from

preventable disease and lack of access to goods and services and infrastructure (energy,

sanitation, communication and drinking water) necessary to sustain basic human capabilities

(UNIDO, 2002).

2.2. Concept and definition of small enterprises

There is no commonly accepted definition of MSES, rather many institutions and scholars

define it in different perspectives. The MSES sector everywhere is characterized by

highly diversified activities which can create employment opportunities for a

substantial segment of a population. This implies that the sector is a quick remedy for

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 unemployment and poverty problem. The realization of a modest standard of living

through curbing unemployment and facilitating the environment for new job seekers

and self-employment requires a direct intervention and support of the government and

other concerned stock holders (Mulugeta Chane Wube, 2011, factors affecting the

performance of women entrepreneur in MSES.). Hence in order to channel all

necessary support and facilitates to this diversified sectors, a definition is needed to

categorize the sector accordingly. However, there is no single and universally

accepted definition of a small enterprise. This is so because the criteria and ways of

categorizing enterprises as micro and small from institution to institution depending

essentially depend on the countries level of development. Even with in the same

country, definitions also change overtime due to changes in price levels, advance in

technology or other considerations. Firms differ in their level of capitalization, sales

and employment. Hence definitions that employ measures of size( number of

employees, turnover, profitability, net worth…) when applied to one sector could lead

to all firms being classified as small, while the same size definition when applied to a

different sector could lead to a different result.(Solomon Mitiku Licture at Dill

University Dep’t of Accounting & Finance )

UNIDO, gives alternative definition for developing countries, accordingly, it defines MSES

as the business firms with less than five (5) employees and small enterprise as the business

firms with five to nineteen (5-19) employees(UNIDO,2002).

In Ethiopia there is no uniform definition at the national level of a common understanding

of the MSES sector. Ministry of Trade and Industry (MOTI) and CSA have defined

MSES separately. While the definition by MOTI uses capital investment, the CSA uses

employment and favor capital intensive technologies as a yardstick. The definition used

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 by MOTI, which uses capital investment as a yardstick, has been developed for

formulating MSES development strategy in 1997(MOTI, 1997:8-21).

According to the MOTI adopted official definition of MSES which are found in all

sectors of the Ethiopian economy, are as follows;

 Micro enterprises are business enterprises found in all sectors of the Ethiopian

economy with a paid up capital (fixed asset) of not more than birr 20,000 but

excluding high technology consultancy firms and other high technology

establishments.

 Small enterprises are business with a paid up capital of more than birr 20,000 but

not more than birr 50,000 but excluding high technology consultancy firms and

other high technology establishments.

Based on the number of workers, MSES may be categorized as follows:

 Up to19 workers- micro and very small enterprises.

 Between 20-100 workers-small enterprises.

 Between 101-500 workers-medium enterprises.

 Above 500 workers –large enterprises (MOTI, 1997).

The Central Statistical Authority (CSA) has attached various definitions to enterprises based

on capital, level of technical and technological capacities. In 2003 the CSA based its

definition on MSES on the size of employment and extent of automation for small scale

enterprises and used a combination of these criteria for defining such enterprise. Accordingly,

it has defined small scale manufacturing as establishments engaging less than 10 persons.

Enterprises in the micro enterprise category are sub divided into informal sector operations

and cottage industries. Cottage and handcraft industries are those establishments performing

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their activities by hand and using non power driven machines. The informal sector is defined

as house hold type establishment or activities which are non-registered enterprises and

cooperatives operating with less than 10 persons (CSA, 2003).

According to regulation, “Micro Enterprise” means an enterprise having a total capital,

excluding building, not exceeding birr 50000 in the case of service sector or not exceeding

birr 100000 in the case of industrial sector and engages 5 workers including the owner, his

family members and other employs. The same regulation defines, “Small Enterprises” as an

enterprises having a total capital, excluding building, from birr 50001-500000 in the cases of

service sector or birr 100001-1500000 in the case of industrial sector and engages 6-30

workers including the owner, his family members and other employs (Art.2(2) ).

2.3. Characteristics of MSES

According to Ato Mezgebu report, MSES have many characteristics which make them

pivotal in accelerating economic growth, these characteristic includes the following:

 Their flexibility makes them best suited to environment constantly changing. They

adapt quickly to various factors that play a large part in daily management.

 MSES Use new materials, new methods of production, new markets, new sources of

materials’ and even new forms of organizations, making them innovate in character.

 Since they are fairly labor intensive, MSES provide an economic solution by creating

employment opportunities in urban and rural areas at relatively low cost of capital

investment.

 Decentralization and disposal of industries allows of a balanced growth of the

economy as a whole. MSES use indigenous raw materials and promote intermediate

and capital goods. So, they contribute to faster economic growth in transitional

economy.

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Finally, because they are mostly set up by individuals they provide an out let for expression

of the entrepreneurial spirit (Mezgebu Amsalu, (2013), markets strategies for MSES

in Ethiopia).

2.4. Types of MSES

The concepts of informal and formal enterprises are the other terms need some contextual

definitions. To begin with, although there is no universally accepted definition of what

constitutes an informal enterprise, there is consensus that they are small scale and operate

outside registration tax and frame works. Accordingly, informal enterprises are defined as

establishments which are mainly engaged in the production of marketed goods and services

but formally unregistered at any government agencies to undertake their business and hence

have no licenses (Bigsten A. ET. Al, 2000, CSA, Hussmans, R. 2001-2002).

On the other hand, formal enterprises are defined as establishments principally engaged in the

production of marketed goods and services but formally registered at respective government

agencies to undertake the business and hence have licenses to operate (Bigsten A. [Link], 2000,

CSA, Hussmans, R. 2001-2002). ). Therefore, both formal and informal MSES were within

the growth oriented sectors. In view of that, brief definition of each are given here just to

indicate their contextual usage in this study “initial capital” is defined here as the original

investment or money used to start the enterprises. These initial funds or capital may be come

from micro finance loan, city government grant, owner’s personal savings, or any other

relatives and family contributions. Current capital, on the other hand, is part of enterprise’s

capital available during the survey. Usually current capital is understood as asset minus

current liability.

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 2.5. The role of MSES in reducing poverty

The ability of MSES to benefit the poor depends to some extent on the mix of service

offered. The main financial services those clients need include the following: reaching

poor women pungently the head of households and providing them with their needs of

different financial services enhance the ability of the poor to help them in establishing

work opportunities which provide them with sources of income. MSES can also

facilitate the provision and maintenance of shelter, which poor people cannot obtain

without help. The effectiveness of MSES in delivering services that meet these needs

can be improved through, facilitating intermediation between informal and formal

financial institution, increasing coverage of the poor expanding access for

disadvantage groups and enhancing the outreach and sustainability of the institutions

(Nelson Candace. 1999 Microenterprise in USA: An overview .Microenterprise

Factsheet Series, no. 1. Aspen Institute, Microenterprise Fund for Innovation.).

Current international thinking is in the tune with a view that acknowledges MSES as a

tool to fight poverty in the long run. The UNIDO approach to this is worth mentioning

here:

“Poverty reduction is simply not going to happen by government fiat but only

through private sector dynamism. The evidence directly linking MSES to economic

vitality, even in the most developed economies. There are suggestions of greater employment

opportunities for poor, low skilled workers, increased skill development and broader social

impacts. The movement to support MSES development internationally reflects a return to

promoting poverty reduction by investing in private sector-driven strategies by all of the

major multi-lateral agencies. Poverty Reduction Strategies (PRS) currently being formulated

in many developing countries places a more pronounced emphasis on the contribution that

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the private sector will have to make compared to the over –reliance on the social agenda that

can characterize earlier poverty reduction strategies”(Perumal K.& Prasad N.D:2-29).

The major contributions of MSES for poverty reduction are listed as follows:

 For employment creation

 Lower investment cost per job

 poverty reduction in both urban and rural areas

 Indigenization

 A venues for indigenous entrepreneurship

 Tapping of savings

 Utilization of domestic technology

 Increasing converge of the poor by expanding access to establish their own related

MSES activities

2.6. The state of poverty in small and micro business in Ethiopia

The role of small business in poverty reduction (alleviation), economic growth and job

creation has emerged as an important topic not only for policy but also for academic research.

The importance of MSES arises in view of the dismal performance of previous policies that

emphasized large scale industrialization. Recent economic reforms have also created

opportunities for the fledgling small business and thus generated interest in small business

research initiatives. It is generally agreed that encouraging the development of small business

is an effective way of fostering growth and poverty reduction, despite conflicting evidence

obtained in several studies. (International Journal of Research Studies in Agricultural

Sciences (IJRSAS)

The situation of poverty in Ethiopia is one of the highest in the world. According to UNDP

(2013) human development report, Ethiopia ranked as 173 out of 189 countries and

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Ethiopia’s economy grew buy 6.1% in 2020, down from 8.4% in 2019, largely because of the

COVID 19 pandemic. the population living in poverty was 24% About 10.5% of the

population is believed to live below the poverty line of one dollar a day in some regions of

the country. Features of poverty in Ethiopia are the existence of many families headed by

windows, a large proportion of orphans and street children’s, suffering from malnutrition and

beggars in urban areas (African economic outlook, 2005).

2.7. Problems and constraints of MSES Development in Ethiopia

The problems encountered and the constraints imposed on MSES have adversely affected its

growth and development. In developing countries the sector encounters a range of problems

and obstacles such as: legal impediments, inadequate capital, and lack of appropriate skill to

operate business. Although, there are similarities in the nature of problems faced by the

sector, some of the critical problem areas may be peculiar to the respective socio-cultural,

political and economic environments. The low level of capital that can be locally mobilized

in a resource deficit environment has also been one of the major obstacles to the sectors

enhanced operation. According to some studies small business respondents indicated that

obstacles that hampered business startups in the sector were unfavorable government

regulation, lack of access to finance and lack of training were the majority of business

operators were self-thought. Other problem areas also included poor urban land

administration, bureaucratic inefficiency, the tedious process and long procedures in issuing

housing permits and the shortage of supply and high cost of construction materials, shortage

of regularities in the supply of inputs combined with low demand for MSES sector

products.(Feb 2022 Journal of Xidian University 16(1):284-296)

According to a study on problems of micro- enterprise development in Ethiopia, some

obstacles and problems encountered were caused by factors such as the following (Addis

Ababa city administration book, 2008)

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  Unfavorable legal and regulatory environments

 Lack of access to institutional finance and business information

 Absence of business premises at affordable rent

 Inability to acquire business skills and managerial expertise

 Lack of access to appropriate technology and business infrastructure

 Discriminatory government policies and practice

The findings of (CSA) and other studies (YitbarekTsige, [Link], P.13, 1996)

have also indicated critical problem areas that have adversely affected MSES Growth and

development. This includes:

 Lack of smooth supply of raw materials

 Problem of government rules and regulations

 In adequate skill to operate a business

 Lack of sufficient capital and access to credit facilities

2.8. Prospects for MSES Development in Ethiopia

As we can understand form the discussions in the preceding sections attempts to deal with

small business issues would require serious strategic thinking and pragmatic approach. It may

be vital to emphasize on integrating the sector in to main stream development. Obviously,

such as an approach would be a serious challenge to those concerned with small business

activities in the development process. These factors should, therefore, be considered in order

to encourage small and micro business development and facilitate its integration in to the

formal economy. The small and micro business has to be supported by the government to

develop its vision and entrepreneurial capacity. Provision of sub contracting policy can

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enhance its productive engagements in wide range of activities and strengthen its relationship

with the large business. Such an opportunity can help the sector in the following areas:

 Reducing obstacles for survival.

 Building sufficient knowhow and capital.

 Transfer of appropriate technology.

 Improving the capacity utilization of big enterprises.

 Helping the enterprises to reduce labor problem during economic

recession.

 Acquiring knowledge of local markets.

Though, the government should also create conducive environment through social and

economic infrastructures that can support and enhance the private sector development

(MUDC report, 2013).

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 CHAPTER 3

METHODOLOGY OF THE STUDY

Description of the study area

3.1 Research Design

Descriptive research design (qualitative and quantitative) will have employed to conduct this

study. Because this design is clearly describes the characteristics of a particular event by

answering questions who, what, when and how. And it insures the maximum reliability of

data and minimum bias. Descriptive research design helped the researchers to take both

qualitative and quantitative measurements. The quantitative measurement helped the

researcher to use statistical method of measurement in order to analyze and interpret the

result obtained from questionnaire.

3.2. Source and method of data collection

The data to access the role of MSES in poverty reduction will collected from primary and
secondary source of data. The primary data collected and used in this study was;
questionnaires, interview and observation methods. The secondary data includes; a
variety of books, published or unpublished government documents, websites, government
report and newspaper, magazine, internet, Robe town MSES bureau and also relevant
data was extricated from statistical bulletin prepared by the central and federal offices of
MSES. So, primary data was the main pillar of this study.

3. 3. Method of Sampling and Target population

According to Robe town MSEs Agency report 2021, there are 4,882 MSES in the Robe city.

Of them 34.4% are service giving, 44.6% are involved in trading, 6.48% in

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manufacturing,8.6% in construction and 5.12% are involved in city agriculture. From this, the

researcher selected the sample of 44 by the following formula.

f= F/1+F(e)2

Where, f = sample size

F= total population

e= margin of error

so, f=4882/1+4882(0.15)2

=44 (85%) is degree of confidence

From each strata, sample will take using proportionate stratified sampling method because

the population is heterogeneous and this technique includes every population element to be

included the study in their proportion to total population. So, service sector =0.344*44= 15

trade sector=0.446*44=20 manufacturing =0.0648*44=3 construction=0.086*44=4 city

farming=0.0512*44=2 total=44

3.4. Methods of data analysis and presentation

The data collected through questionnaires from the sample will be statistically presented. The

data is analyzed using the descriptive technique and qualitative and quantitative in nature.

The responses from the respondents which would be collected using the above methods will

be organized and interpreted and the results will be presented using frequencies, percentages,

graphs and charts in a sensible way.

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 Chapter Four

4 Cost

4.1 Time budget

Time the study cannot complete within day driven with specific weeks as it involves many

activities. Hence the study will have clearly planned and allocated time for each activity that

will be under taken.

The following work plan is designed for the successful completions of this study with in

available time it.

Time period (in moth) 2016
No Activity Feb Mar April May

1. Title selection X
2. Literature finding X
3. Proposal development X
4. Data collection X
5. Data analysis X
6. Report writing X
7. presentation X

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 4.2 Budget Breakdown
There are defects costs to be inbred to undertake the study. The researcher estimate the

following minimum cost per item.

Quantity Per unit Total Cost

SN Material needed (Birr) (Birr)

1 Paper 500 1 500

2 Pen 10 20 200
3 Flash 1 1 400
4 Photo copy 300 2 600
5 Printing 200 2 400
6 Transportation 10 KM 10 100
7 Binder 5 10 50
8 Cover sheet 5 10 50
9 Internet 1200 20cent 240
Total 2540

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 Reference
Addis Ababa city administration book, 2008
Africa economic outlook, 2005
Bigsten A .et al. 2000. CSA. Hussmann’s. R. 2001-2002
CSA, (2003), report on urban informal sector sample survey, October 2003, statistical
bulletin number282, AA, Eth.
FasikawAssfaw (n.d), factors affecting the performance of MSES in Arada and Lideta sub
cities, AA, a project submitted to the school of graduate studies of AAU, unpublished.
FDRE (2005), MSES development strategy, AA, Ethiopia FDRE, ministry of works and
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