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Entrepreneurship and SMEs in Ethiopia

Evaluating the role, prospects and problems faced by women in this emergent sector
Gurmeet Singh
Faculty of Business and Economics, School of Management and Public Administration, The University of the South Pacic, Suva, Fiji, and

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Received 16 April 2007 Reviewed 28 August 2007 Revised 13 December 2007 Accepted 18 December 2007

Rakesh Belwal
Faculty of Business, Sohar University, Sohar, Sultanate of Oman
Abstract
Purpose This paper attempts to identify the problem areas and developmental issues attached to womens entrepreneurship related to small medium enterprises (SMEs) particularly in Addis Ababa, the capital city of Ethiopia. It also attempts to devise certain stratagems for ensuring womens entrepreneurial growth and SMEs advancement in the region. Design/methodology/approach The study was conducted in two phases. The rst phase attempted to identify the problem areas in terms of nature, needs, desire, motivations and problems of women entrepreneurs in Ethiopia by an extensive review of the existing literature. The second phase incorporated a ground survey and focused interviews with groups of female entrepreneurs for assessing the factors related to entrepreneurship. The data pertaining to these issues were collected using 90 personally administered schedules in eight areas in Addis Ababa on the basis of stratied sampling. Basic level statistical analysis was performed using SPSS statistical package. Findings The focused interview identied problems in the areas of securing nances for establishing and running SMEs, lack of entrepreneurial and management competence and exposure, problems in nding the markets and distribution networks; limited opportunities for promotion and participation; limited amount of government and institutional support; absence of technological know-how and integration mechanism; and rampant corruption in an undisguised or disguised form, as major bottlenecks. Originality/value The paper is one of the important studies taken in the context of women entrepreneurship in Ethiopia. No such studies have been undertaken in the past that assess the women entrepreneur in the context of overall SME development. Only a few exist but give more importance to micronance and micro-enterprises. So the paper is original in context as well as in research terms. Proper attention to the issues raised and recommendations made could give a signicant boost to entrepreneurial activities in the region. Keywords Entrepreneurialism, Ethiopia, Women, Africa, Small to medium-sized enterprises Paper type Research paper
Gender in Management: An International Journal Vol. 23 No. 2, 2008 pp. 120-136 q Emerald Group Publishing Limited 1754-2413 DOI 10.1108/17542410810858321

Introduction The word entrepreneur is derived from the French verb enterprendre that means, to undertake (Desai, 1999). The term Entrepreneur has been dened differently by

different people and yet no consensus has been reached on one universally accepted denition. For the purpose of our research an entrepreneur is an individual who propelled by an idea, personal goals, and ambition, brings together the nancial capital, people, equipment, and facilities to establish and manage a business enterprise (Donnely et al., 1990). Entrepreneurship is widely considered as an important ingredient in the modern global economic development recipe (Kirschoff and Phillips, 1989; Keeble et al., 1990; Audretsch and Fritsch, 1991). US studies exhibit 90 per cent of employment growth originating from the entrepreneurial sector of the economy (Michael et al., 1996) and this applies to other countries as well where entrepreneurship has gained importance in pursuit of growth (Hoy et al., 1992). Growth in this context refers to a signicant increase in sales, prots, assets, employees, and locations. Unfortunately, this sort of growth is not vividly visible in African countries. Some of the factors necessary for the development of entrepreneurship such as risk taking ability, access to easy nance, arbitrage, ownership, research and extension education and co-ordination among the factors of production (Mises, 1949; Ladzani and van Vuuren, 2002; Chaudhry and Crick, 2004; Co and Mitchell, 2006) have reported to be missing here from years. In the latest studies-government policies, attitudes, overall quality of public administration and service to entrepreneurship or lack thereof, have been further cited as the most constraining reasons for African entrepreneurship (Elkan, 1988; Kallon, 1990; Rasheed and Luke, 1995; Koop et al., 2000). Entrepreneurship is a virtue that is capable of removing all the vices associated with economic growth, social disparities and employment. Many countries of the world are actively seeking ways and means to promote entrepreneurship. In many developing countries women entrepreneurs are taking leading role in helping their respective governments to establish and develop strong small and medium enterprises (SMEs) that contribute signicantly to poverty reduction. SME development and promotion helps in mobilizing entrepreneurial initiative and autonomy and at the same time strengthens pluralistic and social emancipation processes. The importance of SMEs reects the need to provide employment, enhance economic growth, and generate additional capital for large-scale operations in less developed countries (Hailey, 1987). Muma (2002) argues that SMEs contribute to self-sustained growth and development of nations. In recent years, factors such as privatisation, specialisation, corporate restructuring and downsizing have further encouraged the growth of such enterprises (Solymossy and Penna, 2000). Furthermore, the development of SMEs is seen as accelerating the achievement of wider economic and socio-economic objectives, including poverty alleviation in developing countries. Markets and opportunities created by increased globalisation are also specically good for small business enterprises (Garnick, 2006; Strauss, 2004) and more and more small rms are going global (Delaney, 2004). No doubt ever-increasing global competition presents challenges to companies big and small and their choice to take work abroad can be risky, especially for smaller companies that lack resources to bounce back upon, if a particular venture falls through (Haapaniemi, 1998). Still we cannot deny the fact that with more small businesses taking advantage of the outsourcing trend (Engardio, 2006) natives working overseas also creates new markets and opportunities for home companies to sell their products overseas, creating what some would call a win-win scenario (Strauss, 2004). Here, women could be the major beneciaries, who make up the majority of the small-scale entrepreneurs especially in

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developing countries (Blackman, 2000). This is because women are often marginalised in many developing countries and improving the life of women implies a signicant impact on the lives of their families. Also in case of SME factors such as age, gender, education and training, family background, ethnicity, religion, network membership, and motivation, in addition to other structural and competitive factors play an important role in inuencing entrepreneurs behaviour and decision making (Porter, 1980; Gartner, 1988; Brush, 1997; Orhan and Scott, 2001). Women entrepreneurs appear to be motivated to go into their own business in order to be their own boss, to get job satisfaction, for economic independence or for an opportunity to be more creative (Kandasaami and Tibbits, 1993). According to Rosenthal (2001) women represented the fastest growing segment of new business enterprises in US, owning approximately 9.1 million businesses and accounting for $3.6 trillion of sales and 27 million jobs. Even today they are among the Americas most dedicated entrepreneurs, and the businesses they run are becoming substantial. Africa comprising more than 800 million people in 54 different countries is by far the worlds poorest inhabited continent. Its growth over the past 25 years has been literally negative making it poorer than what it was 25 years ago. African countries have been reported as consistent under performers in the United Nations Human Development Report (2003) (of 175 countries) having occupied the positions from 151 (Gambia) to 175 (Sierra Leone). It is very difcult to point to a single group of African economies that have experienced high-sustainable per capita income growth over the past decade (Gordon et al., 2005). Armed conicts in the region have been reported as the prime reasons for discouraging private investment, destroying infrastructure, and hindering development. However, the political landscape in most of Sub-Saharan Africa has improved considerably with exception of Somalia where Ethiopian troops have recently intervened to deal with the militant organisations. Senegal, Ghana, Ethiopia, Eritrea, Angola, Sierra Leone, and Democratic Republic of Congo have shown considerable progress this time. Ethiopia where political stability was affected due to increased violence after 2006 elections is returning to normality. The Economic Commission for Africa (ECA) report conrms this progress by portrayal of statistics, such as: 19 Sub-Saharan African countries securing growth of 5 per cent or more, poverty reduction in 15 countries, spreading ambit of democracy, 23 countries having qualied for debt relief, and reduced number of major conicts (ECA, 2004). With the recent intervention of Ethiopian forces in Somalia the political situation still remains unsettled in other parts of Africa, however, the ECA report warns that some of the goals will not be met in Africa until 2,150 at the current rates of progress (ECA, 2004). There are several adversities daunting African continent in terms of entrepreneurial advancement. Uneconomic operations impose major threats on industries because of high-cost regions commanding 30 per cent higher price levels than the developing counties (Benn et al., 2005). Moreover, the disproportionately high-indirect costs, primarily because of the hostile business environment, adversely affect the business performance in the continent. In addition, the productivity of the large indigenous rms seams trivial compared to that of their foreign counterparts, who have better capacities of export but also greater command over local markets at times. Further, the African countries business sectors appears to be strongly segmented on the basis of ownership and rm size. According to the International Finance Corporation Report (2003) the challenges for private sector development in Africa include: the small size

and fragmentation of most African economies, their structural rigidities (emphasis on agriculture and the informal sector), marginal status in world trade, vulnerability to continuing political instability, low levels of infrastructure, poorly developed nancial markets, lack of institutional support, lack of business capacity, and other weaknesses in the sector. High levels of poverty combined with slow economic growth in the formal sector have forced a large part of Africas population into drudgeries. Ethiopia being the heart and brain of Africa is not aloof from that. This paper nds entrepreneurship crucial for the development of a strong industrial sector and attempts to identify the problem areas and developmental issues attached to women entrepreneurship related to SMEs in Ethiopia. It also attempts to device certain stratagems for ensuring women entrepreneurial growth and SMEs advancement in the region. Ethiopian agony Ethiopia, with 70.7 (2003) million people, $89 (2002) per capita GDP, and a growth rate of 5 per cent (2002), is one of the least developed countries in the world, having 50 per cent of the population below the poverty line (CIA World Fact-book, 2004). Industries and services contributes to 11 and 37 per cent, respectively, in GDP terms, which is very less in comparison to that of Sub Saharan Africa where it accounts for 31 and 53 per cent of the GDP, respectively. Although Ethiopias export trade registered a record revenue of $1 billion in the 2005-2006 scal year, with booming oriculture and meat export businesses, there is long way to go (Kaleyesus, 2007). However, Ethiopia has consistent underperformed on the export front with a negative balance of trade account. Agriculture sectors still command an upper hand with a contribution of 52 per cent in GDP terms in comparison to 17 per cent for Sub Saharan Africa (UNFPA State of World Population, 2003). The journey of business enterprises in Ethiopia has not been an easy ride. The adversities on various fronts have kept their pace abated. Though small scale industries have been the bastion of the economy, their advancement over the past decades has been null and void (Wudneh, 2005). Their transformation into medium scale industries has been minimal and almost negligible into large-scale industries. Whatever development has been there in the name of industries, it is primarily because of micro and SMEs. Until the late 1990s, the government was not particularly interested in the micro and small enterprise (MSE) sector and there were no attempts to develop the databases and classication systems for the enterprises. One of the rst comprehensive efforts to collect data on the MSE sector was undertaken only by the Central Statistics Authority (CSA) and that too in 1996-1997 (Lois and St-Onge, 2005). The government initiatives have failed to keep adequate pace with the desired entrepreneurial development. According to Issays (2005), entrepreneurship promotion in Ethiopia is facing severe constraints on the government front. Owing to the lack of government initiatives, it recently lost a textile training centre to Kenya that was planned to be established originally in Ethiopia to boost entrepreneurship in the region. This Regional Model Manufacturing and Training Center was desired to be established here by US Africa Trade and Aid Link Corporation for the entire Sub Saharan African countries. In a different incidence, Ethiopia also failed to utilise international funding for supporting development of MSEs and women entrepreneurship. About 70 million Birr

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(about US$14-15 million) European Union fund granted for such developments has reported to be unused owing to lack of government initiatives (Wudneh, 2005). Women entrepreneurship can it be Savior? The issue of women entrepreneurship is becoming increasingly popular across the globe. The participation of women is increasingly being viewed as one of the prime contributors in economic growth. Irrespective of their involvement in small-/medium-scale enterprises or in the informal/formal sectors, their contribution to output and value addition is substantial. Women entrepreneurship is not only necessary for their economic survival but also for strengthening the social system. Fostering womens entrepreneurship development is therefore crucial for economic growth and development. Participation of women entrepreneurs in small business enterprises is very encouraging in some African countries (Sub-Saharan Africa Trade and Economic Cooperation Forum Report, 2003). The participation of women entrepreneurs in MSE sector in Kenya is lower (47.7 per cent) than that of Ethiopia, however there have been indications of their dominance in leather and textile, retail, entertainment, and other manufacturing sectors. Though the Tanzanian situation is not very clear it has been indicated that women made up about 36 per cent of the SME sector in Tanzania. Over 75 per cent of female employment in the sector was reported to be in the trade, restaurant, or hotel category. In Uganda, women constitute about 70 per cent of the rural workforce; many engage in agriculture-related SMEs to fulll their food and security related needs. However, they are doubly disadvantaged owing to little or no start-up capital and limited access to credit (Enid et al., 2005). Small-scale enterprises constitute the bulk of the private sector in Ethiopia. These small-scale enterprises have a great capacity to alleviate unemployment and to contribute to the economic growth of the country (Andualem, 2003). Ethiopia is one of the developing countries where the small-scale enterprises are estimated to employ 1.5 million people. Out of these 1.5 million people that participate in small-scale enterprises the proportion of women is high as small-scale enterprises are an important source of livelihood for women in Ethiopia (Reta, 2000). In studying the participation of women in small-scale enterprises, the survey conducted by the CSA in 2004 covering 48 towns indicated that 65 per cent of the informal sector activities are owned and run by women. With increasing poverty and a high rate of female heads of households both in urban and rural areas (35 and 20 per cent, respectively), women have inevitably become major actors in this sector (Desta, 1999). The women small-scale entrepreneurs which make up the majority of the small-scale entrepreneurs face a number of constraints like lack of capital, technical and managerial know-how, and a lack of access to credit, markets, raw materials and services necessary to improve their income and standard of living (Reta, 2000). Ken (2003) stresses an urgent need to empower women in the SME sector in order to develop them as sustainable wealth creators and a Starting Point in SME development. Further, it has been observed that women, through increased participation in income generating activities, can contribute to stability and a reduction in social problems (Tesfaye, 2003). But, there are wide variety of constraints impending upon women entrepreneurs, such as: social acceptability, gender biases, family responsibilities, political instability, poor infrastructure, high-production costs, poor access to market information, limited access to technology and nances, poor linkages with support services, gaps

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between policy and its implementation, and an altogether unfavorable business environment. Moreover, rapid technological changes and globalisation has impeded womens advances on entrepreneurial front. Studies conducted in the recent past have found that women entrepreneurs encounter more operational and strategic impediments than their male counterparts (Meid and Leidholm, 1998; Rutashobya, 2001). As per the ILO (2004) report the major barriers to expanding women enterprises are: . a lack of market access and information; . a lack of affordable technology and training; . a lack of sufcient nancial resources to buy inputs in bulk; . a lack of appropriate growth nancing; and . low levels of education. Owing to such hardships their participation in SMEs seems to be a distant reality without proper interventions. SMEs are rays of hope particularly for women as they have already proven their worth in most of the micro enterprises. SMEs in Ethiopia comprise of those having paid up capital of 20,000-500,000 Birr (about US$4,000-100,000) and more than 500,000 Birr, respectively; or having 11-15 employees and more than 50, respectively. Attracting more women into these formal ventures can boost industrial activities and productivity in the region. It has been found that women entrepreneurs respond to exibly of entry, change and innovation (Tezer, 2001), which are the basic building blocks of entrepreneurship and the development of enterprises. However, the potential of women in most of the developing countries has not gained impetus as large numbers of women work in the informal sector. Women-headed households in the Ethiopian capital stand at 13.7 per cent, whereas male-headed households are 32.1 per cent. The distribution of economically active population by sex shows that among the male population aged ten years and over, 65.2 per cent are economically active whereas in case of females it is 41.9 per cent as much of the work women undertakes is within the household (Addis Ababa Womens Affairs Ofce, 2005). Past studies reveal that, although the data on women entrepreneurs in the MSE sector in Ethiopia is very limited, women accounts for 65 per cent of urban micro-enterprises (i.e. 380,000 out of 584,913) and 26 per cent of small-scale producers (i.e. 710 out of 2,731) (CSA, 1997). However, the proportion of women-led large and medium-size enterprises within the total of 642 (as reported in the 1997 CSA survey) is not known. Past researchers assume this percentage to the tune of 10-15 per cent. These statistics do not include women involved in subsistence farming and petty trading in the rural areas. It has been observed that percentage of women entrepreneurs dramatically decreases in comparison to men as rm size increases. Moreover, these studies do not exhibit the patterns of growth and transformations among these enterprises. Creating employment for Ethiopian women is a major challenge keeping in view insufcient opportunities in the existing formal sector. Women in Ethiopia not only have less opportunity to receive education than men but also have less employment opportunities i.e. one of the prime factors cited for migration and trafcking (Emebet, 2003). One way of protecting women from the exploitative situations of migration is to create job opportunities within the country. Provision of special assistance to women

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entrepreneurs, according to Reynolds (2004), is one of the most critical structural improvements that can be made by governments. Future development of the country on the entrepreneurial and industrial front, therefore, lies on appropriate vision, policies and the initiatives taken up now. The Ethiopian Government vide a national policy on women in 1993, expressed its intension for eliminating gender and cultural biases hindering women from participating equally in the economic and social development of the country. Research studies reveal that though micro-lending programs are widely available for women in Africa in general, and Ethiopia in particular, the availability of nances is not easy (ECA, 2004). There is a need to understand the behaviour of women entrepreneurs seeking nances since internal and external factors associated with such entrepreneurs can help mitigating problems by framing appropriate policies and awareness plans. Cressy (1992) maintains that female business owners use limited sources of nance than the males, while Read (1998) puts a contradictory result by saying that female business owners choose to use wider range of nancial sources to mitigate out risks. Further, it has been found that women use more internal sources of nance than their male counterparts (Loscocco et al., 1991). Hisrich and Brush (1985) found that women rely solely on personal savings particularly for start up and working capital management while Carter and Rosa (1995) states that female business entrepreneurs borrow less frequently from banks and in much smaller amounts as compared to male entrepreneurs. Second the US Sub-Saharan Africa Trade and Economic Cooperation Forum Report has from time to time demanded appropriate budgets and more representation of women (Second US Sub-Saharan Africa Trade and Economic Cooperation Forum Report, 2003), indicating that discrimination is prevalent in society against women. According to ECA (2004), there are reports claiming discrimination against women entrepreneurs when applying for loans from private sector banks, even though they often have superior collateral. It has been observed that the combined impact of globalisation, changing patterns of trade, and evolving technologies call for skills that women entrepreneurs on the continent do not, for a large part, possess. Some parts of the world are witnessing paradigm shift in their traditional female businesses to incorporate newer niche businesses offering women comparative advantages and opportunities for expansion (Zewde and Associates, 2002). In Hong Kong, many women entrepreneurs have been found adopting e-technology having set up their ventures in related sectors. Most of these women entrepreneurs were previously found in traditional female-oriented businesses in the small service sector, largely in the clothing industry. Similar paths are to be followed by Ethiopian women entrepreneurs to take the country ahead through SMEs. Studies conducted on Ethiopian business entrepreneurs have also revealed that even relatively better off women in Ethiopia tend to focus on areas in which they have traditional gender-based skills and know-how, such as food processing, clothing and hairdressing. Further, the primary reasons that motivate Ethiopian women entrepreneurs are to be self-employed, to be independent, to follow family tradition and to bring high income to home (Reta, 2000). Liberalisation particularly in telecom sector in Ethiopia may boost women entrepreneurship further by enabling women to step into hi-tech ventures. The growing emergence of women organisations such as African Federation of Women Entrepreneurs, All-Africa Business Women Association and African Growth and Opportunity Act in African continent is a good sign for

nurturing such entrepreneurship. Women entrepreneurs in Ethiopia can play an important role for the SME development provided government takes the necessary steps to mitigate the problems and hardships faced by them. Women entrepreneurship development in Ethiopia is becoming crucial for the achievement of countrys broader development objectives; Ethiopian capital Addis Ababa being the most suitable hub for such ventures could do well in serving more than 67 million citizens all over the country forming a readymade market. This paper is based on the study to examine the factors affecting Ethiopian women entrepreneurs in SMEs. Methodology The study was conducted in two phases. While the rst phase attempted to identify the problem areas in terms of nature, needs, desire, motivations and problems of women entrepreneurs in Ethiopia by an extensive review of the existing literature, the second phase incorporated a ground survey and focused interviews with groups of female entrepreneurs (n 90) for assessing the factors related to entrepreneurship within the proximity of Addis Ababa. The background perusal of the research problem covered several issues related to entrepreneurship, gender, work, and SMEs in Ethiopia and an insight was developed over the hindrances coming on the way of women entrepreneurship and SME development. An elaborated attempt was made within the individual capacities to identify the impending factors through secondary data studies; however some critical issues were identied for further investigation during the subsequent ground survey and focused interviews. Ground survey is a method whereby data are collected using a questionnaire and was relevant to ensure standardization of responses and easier analyses, while focused group interview is a method in which rich qualitative data can be gathered through face to face interaction with a focused group of respondents, which in this case were female entrepreneurs and the researchers could probe deeper to elicit responses and identify the convergence in responses. The most important issues that were considered revisiting in the subsequent phase were pertaining to acceptance of women as entrepreneurs, business environment, role of government, availability of infrastructure, and overall rating of the industrial infrastructure in the capital city of Ethiopia, that not only is the industrial capital of Ethiopia but also nodal centre and capital for whole of African Union. The data pertaining to these issues were collected using schedules incorporating appropriate questions in respective categories. Schedule is a questionnaire administered by interview. The schedules were personally administered on the women entrepreneurs working mainly in eight areas viz Akaki, Arada, Gulele, Kirkos, Kolfe, Lideta, Nifasilk, and Yeka in Addis Ababa on the basis of stratied sampling, the list of which was obtained from concerned ofces. Schedule was useful as it enabled the researcher to be present in administering the questionnaire and allowed for greater response rate. The entrepreneurs were selected on the basis of stratied sampling. The eight main clusters were randomly picked, and then stratied according to female entrepreneurs. The advantage was that it added an extra ingredient to random sampling by ensuring that strata within the population are each sampled randomly . . . It offers increased possibility of accuracy . . . (Burns, 1996, p. 83). An altogether 100 such entrepreneurs from SME sectors were covered to gain insight upon the problem at hand, however

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only 90 such responses were found complete for the purpose of analyses. Basic level statistical analysis was performed using SPSS Statistical package. The demographic characteristics showed that out of 90 women entrepreneurs 22 were single, 30 were married, 15 were divorced and 23 were widowed. With regard to education level, 16 were illiterate, 23 completed grades 1-4, 17 grades 5-8, 21 grades 9-12 and 13 completed grade-12. About 68 women had school age children and relatives with them and 22 did not have children. About 48 women had school age relatives dependent on them. Data analyses and ndings The ndings associated with various issues affecting women entrepreneurship in Ethiopia gained from the ground survey are presented rst and followed by issues arising frm the interviews: Acceptance of women entrepreneurs The survey conducted on the women entrepreneurs in Addis Ababa revealed that almost 75 per cent of respondents reported felt that they had acceptance among family, friends and relatives as an entrepreneur. It was further found that almost 58 per cent of the respondent did not face any gender bias in the society being a women entrepreneur. There was mixed response from the women entrepreneurs with regard to their having ample time for managing business over family responsibilities. Though there are no gender biases among the family and acquaintances, almost 60 per cent of the respondents had reported a lack of cooperation on the part of business partners, e.g. banks, suppliers and marketing intermediaries, etc. Almost 78 per cent of the respondents reported a lack of coordination among women entrepreneurs. It can be concluded that the women generally have a high degree of acceptance in Addis Ababa as entrepreneurs. Business environment for women entrepreneurs The study attempted to investigate the business environment in terms of ve factors viz availability of funds, business infrastructure, gap between demand and supply of credit, role of bank and nancial institutions, and competition with male entrepreneurs. It was found that 58 per cent of women were contented with the availability of business infrastructure in Addis Ababa, although almost a third (31 per cent) remained neutral in this regard. However, in terms of easy availability of funds for starting up their business ventures, 71 per cent of the respondents reported gap between the demand made for bank credit by SMEs and supply of funds by the banks; while 62 per cent of respondents rated these banks as not good in terms of their support for SMEs day to day operations. Almost 58 per cent of women reported that they do not nd male entrepreneurs difcult to compete with. The highly signicant positive correlation (0.985, p 0.002, 0.01 level) between the coordination between entrepreneurs and easy availability of funds indicates that increased group coordination may increase access to easy nances. Further, bankers cooperation is found to be highly positively correlated with gap between the supply and demand made for credit (negatively phrased) and support of bank to SMEs day to day operations, respectively, (0.995, 0.000 and 0.967, 0.007, 0.01 level).

Role of government The government of Ethiopia claims to have launched many schemes for the development of women entrepreneurship in the country. However, this study revealed that women entrepreneurs are mostly unaware of such schemes, with 33 per cent of the respondents unable to comment on these schemes and 27 per cent of them showing disagreement against the availability of such schemes. Further, 84 per cent of the respondents were unhappy with the role of government machinery in support of womens entrepreneurship. Almost 69 per cent of the respondents reported a gap between the governments policy and its implementation, while 20 per cent were found neutral on this issue. The same statistics hold for the inadequacy of training and updates pertaining to promotion of women entrepreneurship. A majority (87 per cent) of the respondents denied that the government had ssought their advice in framing policies from time to time. A very high-positive correlation was found between government supporting entrepreneurship and gap between government policies and implementation governments promotion of entrepreneurship and governments seeking advice of entrepreneurs in policy making, respectively, (0.946, 0.015, 0.05; 0.992, 0.001, 0.01; 0.984, 0.002, 0.01 levels, respectively). Availability of infrastructure To the utmost advantage of entrepreneurship, 53 per cent of the entrepreneurs attributed SME registration process in Addis Ababa as simple while 9 per cent of the respondents were found neutral in this context. At the same time, almost 91 per cent of them complained of extremely high-tax rates impeding entrepreneurial growth. Even the legal system was not found supportive for entrepreneurship as 60 per cent of the respondents reported its lacking in safeguarding the interests of women. Moreover, the presence of the demarcated special SME zones for women entrepreneurs was denied by 56 per cent of the respondents with 20 per cent remaining neutral. There were mixed response with regard to entrepreneurs having easy access to market intelligence. The infrastructural issues were further investigated using a different set of questions based on semantic differential scale. As an outcome Figure 1 shows an image prole of infrastructural facilities as perceived by women entrepreneurs in Addis Ababa. While telecommunication and electricity have been rated high in terms of infrastructure, promotional assistance and subsidies have been rated low as exhibited by the image prole. However, the focused group interview revealed discontent among the women entrepreneurs because of the exorbitant rate of telecommunication and electricity (Figure 1). Findings based on focused group interview Though there had been an absence of gender bias in Addis Ababa some women entrepreneurs reported disguised gender discrimination in the form of avoidance of women in offering jobs and taking excuses with reasons viz their being too young, not qualied enough or even too old to secure employment. Some women revealed their lack of mobility (due to their large families and household responsibilities) but this did not jeopardise their work because of their dependence on relatives, maids and family members. A lack of ability to secure proper operating premises at a suitable location was cited as another problem. This meant that many women enterprises had to be operated from homes and sometimes restricted womens access to markets,

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information, opportunities, and business assistance. Moreover, less representation of women as legislators and bureaucrats was cited as a major constraint circumscribing the growth of women entrepreneurship in the country. The women entrepreneurs largely admitted that corruption, in cash or kind, works as a brutal obstacle that disrupts their day to day affairs. The slow moving legal proceedings made them feel handcuffed, preventing them to take on additional assignments without the settlement of the former. They sincerely admitted an absence of educational institutions in the area offering specialised education and trainings related to women entrepreneurship.

Based on the focus interviews the most pressing problems that need urgent solutions were identied as: . problems in the area of securing nances for establishing and running SMEs; . lack of entrepreneurial and management competence and exposure; . problems in nding the markets and distribution networks; . limited opportunities for the promotion and participation; . limited amount of government and institutional support; . absence of technological know-how and integration mechanism; and . rampant corruption in the undisguised or disguised form. Discussion and policy implications The survey conducted on the women entrepreneurs in Addis Ababa did not report any gender bias in the society for women entrepreneur, which largely contradicts the ndings of gender biases as revealed in the review for the entire African continent (ECA, 2004). Overall, a lack of cooperation on the part of business partners, e.g. banks, suppliers and marketing intermediaries, etc. was witnessed. However, this cannot be attributed as gender bias until these nding are compared with a similar study specically conducted on male entrepreneurs. The survey reveals that funds are not easily available to women entrepreneurs. However, it was observed that the gap between the demands made for bank credit by SMEs and supply of funds by the banks can be somehow reduced by establishing good coordination among entrepreneurs and securing bankers cooperation. This indicates that the role of interpersonal behaviour could be signicant in dealing with such issues. Governments all over the world have launched schemes to support womens entrepreneurship, however creation of awareness of such schemes is also important. The gap between the government policy and its implementation, lack of promotion and participatory approach impede the effective implementation of such schemes. The correlations revealed in the ndings clearly indicates that government will be considered to be supporting entrepreneurship when it attempts to reduce the gap between its policies and implementation, resorts to promotion of entrepreneurship through training and updates, and seeks the advice of women entrepreneurs in the form of participative decision making. The ndings from the survey also reveal that the government being good is some aspects and poor in others is not helpful, rather optimisation is needed. While making SME registration simple and creating some infrastructure is helping women entrepreneurs the high-tax rates and electricity charges, lack of legal support, etc. are acting as deterrent too. So, a better approach would be to determine the optimal mix to be offered. The focused interview results revealed that mere adherence on the physical infrastructure, i.e. hardware would not be effective in this regards. Rather there is a need to develop effective software too in the areas of creating a healthy environment for entrepreneurship viz work culture, support to working women, representation of women as legislators and bureaucrats, corruption control, sound legal environment, and access to educational institutions in the area offering

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specialised education and trainings related to women entrepreneurship. This indicates the creation and nurturing of special zones and specic policies. As an initial measure to control, the following policy implications demand immediate attention under the present set of ndings. It can be put forth that women entrepreneurs need to be promoted and motivated for strengthening the private sector enterprises as a prime creator of employment and economic growth. Improvement in their qualications through related business education would denitely give them a competitive edge. In line with out research (Carter and Rosa, 1995), this study has revealed that women entrepreneurs are affected by the shortage of capital. Therefore, they need to be supported by formulating some criterion-based schemes. Low interest rates, priority allocation of credit and foreign exchange, and preferential loans can help in mitigating this problem. Instead of absorbing new entrants into the labour force in the name of supporting women, it is far better to develop entrepreneurship, i.e. creating job providers not job seekers. Manpower planning in women-run enterprises demands rational decisions and an altogether attitudinal change in the thinking towrads women entrepreneurs is required to evolve them into real professionals. Consumers bias towards local products from women entrepreneurs is a real threat in spite of their being comparatively better. Appropriate promotional strategies need to be formulated in this regard and to boost exports from the region, custom related practices and associated transit constraints need to be addressed keeping in view the current marketing environment. This can also be extended to import of industrial inputs necessary to support women entrepreneurship. On the basis of the hard facts prevailing on the ground, government should pay attention towards arresting illegal trade practices viz dumping, smuggling, under-invoicing, etc. and the reconsidering the tariff rate and tax structure. The application of credible role model theory can be extended to the nurturing of womens entrepreneurship in Ethiopia with highlighted success stories. Several other programs for women entrepreneurs in Ethiopia can be conceptualised to provide sufcient weight to: . individual and organisational capacity-building and enterprise creation; . womens participation in trade fairs in different African countries; and . increased communication vide interpersonal and audio-visual means. The recent G-8 summit makes clean governance an important determinant for disbursement of aid and other concessions. Moreover, the planned utilisation of such aid is doubly important keeping in view various lapses experience in the recent past. Conclusion The entrepreneurship issue in Ethiopia is as important for the survival of its population. Being one of the poorest countries of the world, Ethiopia cannot survive indigenously without developing it in true sense. The contribution of women entrepreneurs is equally important in this drive and their marginalisation could close the doors of development. Although women are accepted to take on entrepreneurial activities, whole hearted support from family, society, and government is still necessary in many terms. Building an environment of work culture, awareness, and trust is necessary to make progress in this regard. Equally important is the coordination among the entrepreneurs and the assistance of supporters. The infrastructure in hardware terms needs to be supplemented by software of education, training and extension to lead the women

entrepreneur from small and micro enterprises to the pathway of medium to large-scale enterprises. On the resolution of these issues lie the success of the country and the fait of women entrepreneurs.
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