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Definition of Micro and
Small Enterprises
The actual by the Ministry of Trade and
Industry adopted official definition of Micro and Small
enterprises in Ethiopia is as follow:
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Microenterprises are business enterprises
found in all sectors of the Ethiopian economy with a paid-up capital (fixed
assets) of not more than Birr 20,000, but excluding high-tech
consultancy firms and other high-tech establishments.
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Small Enterprises are business
enterprises with a paid-up capital of more than Birr 20,000 ($2,500) but not more than Birr 500,000
($62,500) but excluding high-tech consultancy firms and other high-tech
establishments.
(1 US$ equals about 9 Birr, 1 Euro equals about
10 Birr in 10/2003)
The Central Statistical Authority (CSA), for the
purposes of its survey on "Urban Informal Sector Activity Operators and
Small-scale Manufacturing Industries", attached various definitions to
enterprises in different sectors, viz: the informal sector, cottage or
handicrafts, small-scale manufacturing industries and medium- and
large-scale manufacturing industries. The CSA based its definitions on the
size of employment and extent of automation for small-, medium- and
large-scale enterprises and used a combination of criteria for defining
informal sector operators. However, as indicated in the National MSE
Strategy, shortcomings in the drafting of these definitions may have meant
that some capital-intensive establishments, which should fall solely under
medium- or large-scale enterprises, may possibly have come within the scope
of the definition for the MSE sector. Therefore in order to exclude those
capital-intensive enterprises, which should not be entitled to the support
services established for "real" MSEs, it was advised that a new definition
be drafted which takes this into account. Hence, a definition that is based
on capital, and which takes into consideration the level of technical and
technological capacities, was adopted as part of the MSE National Strategy.
CSA definition of enterprises:
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"Large and medium scale manufacturing
enterprises have been classified as establishments with more than ten
employees using automated machinery.
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Small and medium enterprises are establishments
that engage less than 10 persons using power driven machinery.
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Cottage/handicrafts are household type
enterprises located in households or workshops normally using own or family
labour and mostly manual rather than automated/mechanical machinery."
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