The Relationship Between Microenterprises and Socioeconomic Development Among Youth Group in Addis Ababa, Ethiopia

Abstract

Back Ground The unemployment rate of youth group is currently 31.46% in Addis Ababa. Moreover, it is believed that, as the major source of social problem to youth group is “lowest economic capacity”. Objective: The main objective of this study was to assess the relationship between microenterprises and socioeconomic development among youth group in Addis Ababa, Ethiopia. Method: A survey based study was used to collect data on the relationship between microenterprises and socioeconomic development among youth group in Addis Ababa, Micro and Small Enterprise Program started before 7 years (2004) it has to be changed in to 2003G.C. This program targeted different parties of the society (MSE 2010).The total of 120 micro enterprises which operated by youth groups. The sampling method was involved in ten sub-cities of Addis Ababa. The major micro and small enterprise activity identification was based on the available information from MSE packages and selected randomly. Data analysis was made by using descriptive statistics. Results: The findings of this study have vital implications to poverty reduction, employment creation, women empowerment of microenterprises, and the use of consultancy services by microenterprises targeting youth group for the growth of their enterprises. The major constraints of the sector, specifically, for youth target microenterprises, such as place; credit access; and misunderstanding, disagreement and mistrust among group members has to be addressed. This could be achieved by coordination of the different stakeholders of the sector such as Addis Ababa City Municipality, Addis Ababa MSE Agency, Addis Ababa Youth Association, Microfinance Institutions, and NGOs. Moreover, different supports for youth group microenterprises have to be continuing and it has to be strengthening, furthermore, such supports have to be more of growth oriented. Since, the results of the study shows that majority of youth targeting micro enterprises are not using consultancy services, the stake holders of the sector has to provide favorable conditions. Conclusion: Most of the respondents believed that employment in microenterprises could reduce poverty, and leveled as high in terms of its extent of importance to poverty reduction. From the available psychosocial constraints afraid of failure and criticism, faulty socialization, and low dignity of labor and inadequate motivation are the most serious problems that young entrepreneurs are facing.