Empowering MSMEs for the Country Development - Part 2
Naturally, we constantly keep our future in mind when formulating our thoughts and ideas. Whether pursuing a certain career path or running an MSME, it is all done in preparation for the future. How would MSMEs impact not just your future but the futures of many other individuals as well? Previously in the series, we covered the benefits and current situation of MSMEs, and in this piece, we will speak about how the future would look with an expanded number of MSMEs in Ethiopia as well as for yourself.
When compared to other industrial sectors, MSME has been able to demonstrate strong growth and success. The key benefit is that they provide additional employment opportunities at low capital costs and provide the government with numerous programmes and practises for a better and more effective mechanism, which prevents future payments from being postponed.
With employment factors, it was seen in other developing countries that they were able to offer job opportunities throughout the entire country. For the future of Ethiopia, this seems to be the biggest hit as it prevents regional imbalance and creates an equitable distribution of national income; subsequently, they contribute to the socio-economic development of the entire country . Currently, in Ethiopia, there are 115,200 MSMEs (as of 2021) with a 50 billion Br amount of credit benefiting them, and through that, 585,119 employment created; however, there are regions within Ethiopia that tend to have more distribution of MSME jobs creations.
Within the industrial field, MSMEs are the only sector that offers maximum opportunities for both self and wage employment ; in terms of random future catastrophes and rapid changes, like Covid-19, the pandemic, climate crisis and within-country crises, there will always be a need for governance in preparation for the unexpected. Without a doubt, there will experience a loss of employment, yet MSMEs can provide that comfort and insurance. In addition, with growing development, Ethiopia has taken on the inclusivity of technology and applied it to different scenarios, allowing more rapid growth in the MSME sector. Other countries around the world are rushing to enhance their digital capacity and reap the transformative effects of these technologies.
However, even while the thought of starting your own business and the concept in general are intriguing, you undoubtedly have some questions causing your head to tilt slightly. Regarding the financial sector, Ethiopia's financial sector credit constraint and thus meaning most banks will be choosing the least risky and most profitable among the credit applications, which are rarely from MSMEs. This could be because MSME appraisal is more complicated than other borrower classes. However, even simple credit products such as overdraft facilities are practically not available. How can this be resolved, you say?
 How msmes help to boost the economy of developing country? Available at: https://www.globaljurix.com/blog/how-msmes-help-to-boost-economy-of-developing-country.php (Accessed: November 3, 2022).