Constraints_for_the_Growth_of_women_Entr

© 2022 IJRAR August 2022, Volume 9, Issue 3 www.ijrar.
org (E-ISSN 2348-1269, P- ISSN 2349-5138)
Constraints for the Growth of women Entrepreneur

s: In the case of Amhara Women Entrepreneurs
Association (AWEA), In Amhara Regional State,
Ethiopia.
Alemnew Getnet Bayeh1, Prof. N. Subba Rao2, Dr.D.Ashalatha (Associate professor) 3
1Research Scholar, Department of Economics, Andhra University, Visakhapatnam, India.
2Principal Guide, Department of Economics, Andhra University, Visakhapatnam, India.
3Joint Research Guide, Department of Economics, Andhra University, Visakhapatnam, India.
Abstract- This research presented findings about the constraints for the growth of women entrepreneurs in the
case of Amhara Women Entrepreneurs Association (AWEA), Amhara Regional State, Ethiopia. Different people
have defined the term "Entrepreneur" differently, and no single universally accepted definition has been
reached. But for shared understanding, an entrepreneur is a person who sets up businesses, takes on risks in
the hope of profit, and organizes a venture to benefit from an opportunity rather than working as an employee.
According to different literatures, gender discrimination, lack of enterprise culture, inadequate business
support systems, and underdeveloped markets and infrastructure are problems that affect women entrepreneurs
in developing nations. For this research, the researcher used multistage sampling methods and took 389
sample sizes. Structured questionnaires, interviews, and Focus Group Discussions (FGD) were instruments for
the data collection. The logit model was applied to identify the main constraints for the growth of women
entrepreneurs. Employment and capital growth rates were taken as an indicator for the growth of women
entrepreneurs. Access to finance, access to raw material/inputs, stiff Competition, educational status, marital
status, access to training, access to infrastructures, access to working premises, access to information and
modern technology, tax Burden, amount of initial capital, age of respondents, age of the business and family
size were the included independent variables for growth constraints of women entrepreneurs. Among the
respondents, 35.73% were aged 31 to 40, 51.41% completed grades 11th and 12th, 75.84 % were married,
57.58% had a family size of 4 to 6, 31.36% were engaged in mini-market business,65.79% started without
making a market survey, 98.46% did not get training before starting the business,77.12% didn't have
appropriate working premises. The annual average growth rate of women entrepreneurs' business measured by
the growth rate of employees was 0.68%, with the smallest -20% and a maximum of 50%. When measured by
the capital growth rate, it was 7.4%, with a minimum growth rate of 5.3% and a maximum of 13.4%. The
average initial working capital was 45,685 ETB with a minimum of 2,000 and a maximum of 150,000 ETB. On
average, 67% of women’s enterprises were in positive progress during the survey period. the Among the
included independent variables, except family size, age of respondents and age of the business, all other
variables are statistically significant and influence the growth of women entrepreneurs. Since women
entrepreneurs significantly contribute to economic growth and employment creation, the government and other
stakeholders should support women entrepreneurs by solving constraints for their business growth.
IJRAR22C1929 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 546
© 2022 IJRAR August 2022, Volume 9, Issue 3 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
Key words: AWEA, Capital growth, Employment growth, logit model, Women Entrepreneurs.
Introduction
The word "entrepreneur" comes from the French verb "enterprendre," which means "to take on" ((Acs et al.,
2008). The term "entrepreneur" has been defined in a variety of ways by different persons, and no universally
agreed meaning has emerged. An enterprise can range from opening a small shop to establishing a high-tech
industry (Sinha, 2003). As a result, an entrepreneur can be distinguished not only by the activities he or she
engages in, but also by his or her lifestyle, attitudes, values, and behavior, all of which contribute to the
entrepreneurial personality. As a result, various academics and business organizations offer the following
expressions.
An entrepreneur, according to Merriam-Webster, is "one who organizes, manages, and assumes the risks of a
business or venture."
"A person who organizes and manages any company, especially a business, usually with much initiative and
risk," according to Dictionary.com.
A person who performs entrepreneurial tasks such as coordination, organization, supervision, and risk-taking
(Say 1827).
An extraordinary innovator with boundless energy, clarity of vision, and the ability to act (Hébert & Link,
2006).
High desire to solve problems, create objectives and achieve these goals via one's own efforts (McClelland,
1961; Rao &Mehta, 1978).
An entrepreneur is someone who starts and runs a business or economic activity (Pareek & Nadkami, 1978).
Women's companies are one of the world's fastest-growing entrepreneurial groups (Brush and Cooper, 2012).
In all economies, they contribute significantly to innovation, job growth, and wealth development (Maheshwari,
2000; Headd, 2000; Davidsson, 2005; Brush and Cooper, 2012).
In Ethiopia, it has been recognized that women substantially contribute to GDP and employment. Women
played an essential part in retail and wholesale commerce, ensuring families' survival. However, in many
nations, the remarkable expansion of women-owned firms has slowed.
Today, women entrepreneurs face a fork in the path. The present incentive structure, trade policies, financial
institution rules, and other policies do not satisfy the sector's demands or the problems provided by the new
economy in this situation. Women entrepreneurs need incentives and assistance to grow competencies and
remain ahead of the competition in both domestic and international markets. Many governments strive to build
initiatives to recruit, retain, and promote women; however, the majority of women work in small enterprises
that are less lucrative.
The Amhara Women Entrepreneurs Association (AWEA) is a private regional non-profit organization for
female entrepreneurs that were founded in 2004. Bahir Dar, Gondar, Dessie, and Debre Markos are the four
places where AWEA was founded. The organization is currently growing its branches. It has around 88
branches in various cities and villages, with over 30,000 female members. The headquarters are in Bahir Dar
(AWEA annual report, 2019).
Statements of the Problem

Women entrepreneurs have not achieved their full potential in a male-dominated business society due to the
innumerable constraints they face in their endeavour to set up viable business ventures. Most women
entrepreneurs mainly practice cross-border trade; some are informal (Mauchi, 2014). A closer look at the
business world reveals that men rule it. Despite representing 50% of the population, women, in general, face
many challenges in business.
The extent and form of women's participation in the market differ from that of men entrepreneurs. The reasons
are strongly linked to the roles and positions of women in Ethiopian society. According to research findings,
women entrepreneurs in developing countries suffer from gender discrimination in society and laws,
underdeveloped enterprise culture, an inadequate support system for businesses, and underdeveloped markets
and infrastructure.
Women-owned businesses, concentrated in the low growth segment, face constraints such as poor access to
finance, lack of business development services and business networks, limited exposure to business
management experience, and the challenges of juggling business with household and family responsibilities
(Solomon, 2010).
Storey (2016) states that there is no greater initiative a country can take to accelerate the pace of entrepreneurial
activity than to encourage more women to participate. It has been established that the male rate of
entrepreneurial activity range over 3 times that of females, especially in the developing world, whereas it is
almost identical in the developed world (Reynolds et al., 2005). Studies by Nijhawan and Dubas (2007) found
that entrepreneurial activities result in spillover benefits, thus satisfying public good characteristics.
Much research has not been done, especially on "constraints for the growth of women entrepreneurs' business in
Ethiopia. Even though few types of research have been done on the challenges of women entrepreneurs,
descriptive methods did all. Since this research is done using econometrics models, the results helped identify
the significant constraints for the growth of women entrepreneurs in Amhara Women Entrepreneurs
Association (AWEA), Amhara Regional State, Ethiopia, and tried to show the impact of each variable.
Objective of the Study: The main objective of the study is to identify constrains for the growth of
women entrepreneurs in the case of Amhara Women Entrepreneurs Association (AWEA) Amhara Regional
State Ethiopia.
Research Hypothesis
A hypothesis is a tentative relationship or testable assumption/prediction/conjecture between two or more

variables that gives a direction to a search. This research formulated the following hypotheses and tested them
after collecting necessary data and regression analysis.
H1: There is no statistically significant relationship between access to finance and women's enterprises' growth.
H2: There is no statistically significant relationship between access to raw materials/ inputs and the growth of
women's enterprises.
H3: There is no statistically significant relationship between stiff competition and the growth of women's
enterprises.
H4: A higher level of Education does not affect the growth of women's enterprises.
H5: There is no statistically significant relationship between the marital status of respondents and the growth of
women's enterprises.
H6: Access to training does not improve women's enterprises.
H7: There is no statistically significant relationship between access to infrastructure and women enterprises'
growth.
H8: Availability of Working premises and marketplace do not affect the growth of women's enterprises.
H9: There is no statistically significant relationship between access to information and modern technology and
the growth of women's enterprises.
H10: Higher tax burden does not significantly impact the growth of women's enterprises.
H11: There is no statistically significant relationship between the growth of women's enterprises and the amount
of their initial capital.
H12: The age of women doesn't significantly impact the growth of women's enterprises.
H13: There is no statistically significant relationship between the growth of women's enterprises and the age of
the business in the market.
H14: Family size does not significantly influence the growth of women's enterprises.
Review of Related Literatures
Early in the 18th century, the French economist Cantillon provided the first formal definition of
entrepreneurship as: “self-employment, regardless of the nature or direction, and when the risk tolerance and
the organization of production factors are needed to produce a good or service in the market” (Landström,
2010).
Singh and Saxena (2000) mentioned that in India, shyness in business interactions, low achievement
motivation, risk-averse attitude, lower level of education, the burden of family obligations, gender bias at the
level of family and society, lack of managerial skills and experience, lack of business-related information, non-
availability of finance are some of the challenges for women entrepreneurs.
Singh and Belwal (2008) found that the main problems in the areas of securing finances for establishing and
running Small businesses in Ethiopia are; lack of entrepreneurial and management competence and exposure,
problems in finding the markets and distribution networks; limited opportunities for promotion and
participation; a limited amount of government and institutional support; absence of technological know-how
and integration mechanism; and rampant corruption in an undisguised or disguised form.
In another study conducted by Tesfaye (2003) in Ethiopia, social acceptability, gender biases, family
responsibilities, political instability, poor infrastructure, high production costs, poor access to market
information, limited access to technology and finances, poor linkages with support services, gaps between
policy and its implementation, and an altogether unfavorable business environment were found as constraints of
women entrepreneurs.
According to Okafor and Mordi (2010), 70% of women entrepreneurs with small businesses started as
microenterprises and grew. They also found that lack of suitable location or sales outlet, stiff competition, the
low purchasing power of the local population, lack of marketing know-how, seasonal nature of the business,
lack of market information, inadequate infrastructure, and lack of time (due to multiple tasks), lack of raw
materials, and lack of working capital are constraints of women entrepreneurs in Ethiopia.
Methodologies
In this study, multi-stage sampling designs were used to select sample respondents. The researcher purposefully
selected ten branches (Debre Markos, Mota, Kombolcha, Dessie, Mekiet, Debre Tabor, Woreta, Bahir Dar,
Gondar, and Injibara) based on their number of members, distance from the headquarter (Bahir dar), cost and
time for data collection, and duration of the establishment. From the selected sample branches (14,061
members), the researcher took 389 samples by the proportional method.
𝑵
The sample size (n) was taken using Yamane’s formula (1967). n = ------------------------- (1)
𝟏+𝑵(𝒆𝟐 )
Where “n” is the sample size, “N” is the total population, “e” is the desired level of precision (5%).
14,061
n= 2
= 389.
1+14,061(0.05)
This study used both secondary and primary data sources. Primary data was collected through structured
questionnaires, interviews, and Focus Group Discussions (FGD).
Secondary data was also collected from offices' annual, quarterly, and monthly reports, publications, journals,
books, and websites.
Econometrics Model Specifications and Variables
Various econometrics models can be used to establish a relationship between the dependent and independent
variables.
According to (Hosmer and Lemeshow 2000), Logistic regression is a popular modelling approach when the
dependent variable is dichotomous or polychotomous. This model allows one to predict the log odds of
outcomes of a dependent variable from a set of variables that may be continuous, discrete, categorical, or a mix
of any of these.
In this research, the outcome of the dependent variable (growth of women's enterprise) is binary (when there is
the growth of the business, "success" = 1, or "no growth/ fail" = 0). Binary logistic regression can describe the
relationship between one or more independent variables and a binary outcome variable with only two possible
values.
When we compared the Logistic model with its competitor, the probit model, it is less sensitive to outliers and
easy to correct a bias (Copas, 1988). In instances where the independent variables are categorical or a mix of
continuous and categorical, logistic analysis is preferred to discriminant analysis (Agresti, 2002). The
assumptions required for statistical tests in logistic regression are far less restrictive than those for ordinary least
squares regression. Hosmer and Lemshew (2000) pointed out that logistic regression has an advantage over
others in analysing dichotomous outcome variables. It lends itself to a meaningful interpretation. The logit
model is simpler in estimation than the probit model. Therefore, a binary logistic regression model is used in
this study.
Following Gujarati and Porter (2004), the logistic distribution function for the growth of women's enterprises
can be defined as a probability function.
1 1
P(Y= ) = P(y = ).--------------------------------------------------------------------- (2)
𝑋 x1,x2,…,xk
Where, “X” denotes the set of explanatory variables or X1, X2… Xk separately independent variables.
In a binary response model, interest lies primarily in the response probability
1
P(y = ) = F (β0 + β1 X1 + β2 X2 . . +βkXk) -----------------------------------------------------(3)
𝑋
Where “F” is a function taking on values between zero and one: 0 ≤ F (Z) ≤1, for all real numbers Z., because
the probability is non-negative and not more than one.
1
Pi = E(Y = 1/Xi) = … … … … … … … … … … … … … … (4)
1 + e 0 1 1+β2 X2 ..+βkXk)
−(β +β X
Where, Zi = β0 + β1 X1 + β2 X2 . . +βkXk the above formula can be rewritten as shown below for easy
understanding.
1 ezi
Pi = = 1+ezi … … … … … … … … … … … … … … … … … … … … … … … … … (5)
1+e−zi
The above formula indicates that as the value ranges from the negative infinitive to the positive infinitive, P i,
the probability of the occurrence of the dependent variable oscillates between 0 and 1. Therefore, when (Pi) is
the probability of growth of women's enterprises and (1-Pi) is the probability of not the growth of women's
enterprises.
This can be represented as:
1
1 − Pi = … … … … … … … … … … … … … … … … … … … … … … … … … … (6)
1 + eZi
Now the most important element in the logistic regression i.e., odds ratio that can be obtained from equations
Pi
(4) and (5) which is represented as as shown in the following expression:
1 −Pi
Pi 1 + eZi
= = eZi … … … … … … … … … … … … … … … … … … … … … … … … (7)
1 − Pi 1 + e−Zi
When we take the natural logarithm of equation (6), we can obtain the following formula for logit model, which
is mostly represented as Li:
𝑃𝑖
𝐿𝑖 = ln ( ) = 𝑙𝑛eZi = 𝑍𝑖 = 𝛽0 + 𝛽1 𝑋1 + 𝛽2 𝑋2 . . +𝛽𝑘𝑋𝑘 … … … … … … … … … … … (8)
1−𝑃𝑖
Then if the disturbance/error term Ui is taken into account the logit model becomes:
m
Zi = β0 + ∑ βiXi + Ui … … … … … … … … … … … … … … … … … … … . . … … … … (9)
i=1
𝑃𝑖
Where: 𝛽0= the intercept. It is the value of the log odds ratio ( ) when X or explanatory variable is zero.
1−𝑃𝑖
β1= The slope measures the change in L (logit) for a unit change in explanatory variables (X);
Generally, the specific logit model for the growth of women’s enterprises can be defined as:
Yi = β0 +β1ACFIN+ β2ACRAWM+ β3STIFCOM+ β4EDUN+
+ β5MARTSTAT+ β6ACTRAIN+ β7ACCINFRA+ β8ACCWOKPREM+
Β9ACCINFOMOTECH+ β10TAXBURDN+ β11INICAPTA + β`12AGERSPOND
+ β13AGEBUSINE+ β14 FAMSIZ+Ei --------------------------------------------------------(10)
Where, Yi is growth of enterprises interms of employment and capital, βi are slope parameters to be estimated,
Ei is the error term.
Variables
Dependent Variable: The researcher took as a dependent variable the growth of the enterprises (Y i) expressed
by the growth of employment and capital either simultaneously or separately. When we say there is growth in a
woman's enterprise, we are saying either her labour employed increases, the volume of sales increases, or
capital increases. The result of the dependent variable is a binary outcome. Either "growth" or "no growth". If
there is an increase (positive) relative to a reference period, we took it as "growth", or if there is no change or
reduction relative to the reference period, we took it as "no growth/ reduction".
Given this, the outcome of the ith respondent Yi is measured as a dichotomous variable.
Yi = 1 if the ith woman’s business grows
0, otherwise
Measurement of growth of Women’s enterprises

Measuring of Employment growth
𝐧𝐨 𝐨𝐟 𝐞𝐦𝐩𝐥𝐨 𝐢𝐧 𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐭𝐢𝐦𝐞−𝐧𝐨 𝐞𝐦𝐩𝐥𝐨𝐲𝐞𝐞𝐬 𝐢𝐧 𝐢𝐧𝐢𝐭𝐢𝐚𝐥 𝐩𝐞𝐫𝐢𝐨𝐝 𝟏
Employ annul avera growth rate (r1)= ∗ 𝒂𝒈𝒆𝒐𝒇 𝒃𝒖𝒔𝒊𝒏𝒆𝒔𝒔 ]*100--
𝐧𝐨 𝐨𝐟 𝐞𝐦𝐩𝐥𝐨𝐲𝐞𝐞𝐬 𝐢𝐧 𝐢𝐧𝐢𝐭𝐢𝐚𝐥 𝐩𝐞𝐫𝐢𝐨𝐝
(11)
If the value of the growth rate is positive, it shows that there was “growth” in women entrepreneurs; otherwise
(if it is zero or negative value), there was “no growth” within their duration in the business activity.
Unfortunately, for this research, getting recorded data on women entrepreneurs was challenging. Therefore, the
researcher tried to collect primary data by survey method.
Measuring Capital growth
Capital growth is the appreciation of the value of an asset over time. It is usually calculated and presented on an
annual or Year-on-Year basis, in the form of a percentage.
The researcher used general formula of compound interest to know the growth rate of women entrepreneurs’
capital.
𝑭𝑽 𝟏
Capital growth rate (r2) = ( ) 𝒕 − 𝟏---------------------------------------------- (12).
𝑷𝑽
Where, r2 = capital growth rate, Fv = current amount of capital for women entrepreneurs.
PV = amount of capital when they started their business, t = time of duration in the business activity.
If the value of “r2” is positive, on average, the capital of women entrepreneurs “was growing” within their
duration in the business activity. If “r2” is negative, this shows that, on average, their business activity was “not
growing” (it is declining).
Independent Variables
Based on different kinds of literature and from the researcher's experience, the following variables are expected
to affect the dependent variable and will be included in this study.
A. Access to Finance (ACFIN; Dummy: 1 = yes, or 0 = no access): It was hypothesized to have a positive
impact on the growth of women enterprises.
B. Access to raw material/inputs (ACRAWM; dummy: 1 = yes, or 0 = no access)
For the type of product they produce, women entrepreneurs use raw materials as one factor of production. The
availability of the supply of raw material (input) expects to increase the growth of women enterprises.
Therefore, it is hypothesized that the availability of the supply of raw materials will have a positive impact on
the growth of women's enterprises.
C. Stiff Competition (STIFCOM :( dummy: 1 = yes, or 0 = no competition). It is expected to affect women
entrepreneurs’ production negatively.
D. Education (EDUN; Categorical): It was taken as a categorical variable by representing 0 for "grade 1st to
6th," 1 for "grade 7-10th," 2 for "grade 11th to 12th ", 3 for "Vocational training", and 4 for “degree+”.
Here level of education expects to have a positive effect on the growth of women's enterprises.
E. Marital Status (MARTSTAT: Categorical). It was taken as a categorical variable by representing 0 for
"Single," 1 for "married," 2 for "divorced," and 4 for "widowed" women entrepreneurs.
F. Access to Training (ACTRAIN: Dummy; 1 = Yes or 0 = no Access). Accessibility to different skill
trainings might positively affect the growth of women entrepreneurs.
G. Access to Infrastructures (ACCINFRA: Dummy; 1 = yes or 0 = no Access). Access to purified water,
electric power supply, and safe road taken as infrastructures. Thus, the availability of these infrastructures
expects to have a positive impact on the growth of women entrepreneurs.
H. Access to working premises and market places (ACCWOKPREM: Dummy, 1 = yes or 0 = no access)
In business activity, an appropriate working premise is important for success. When women entrepreneurs do
not have their appropriate working premises, they rented shops from others. This might reduce the growth of
their business.
I. Access to information and modern Technology (ACCINFOMOTECH: dummy; 1 = yes, or 0 = no
access)
Information and modern technology use to get market information easily, to advert about products/ services
or to make market linkage with other entrepreneurs. It might increase the growth of women's enterprises.
J. Tax burden (AXBURDN: Dummy; 1 = yes/ based on income or 0 = not based on level of income)
In Ethiopia, the tax rate ranges from 10% to 35% of the level income. Three categories of taxpayers A, B & C.
Imposing a high level of tax may reduce the growth of women entrepreneurs.
K. Initial Capital (INICAPTA): In this research, initial capital indicates the total amount of capital women
entrepreneurs had when they started their business. It was taken as continues variable.
L. Age of Respondents (AGERSPOND): Age for women entrepreneurs, it is expected to have positive and or
negative influence on the growth of women entrepreneurs.
M. Age of the Business (AGEBUSINE): This is the total number of years from the business started and to the
survey period.
1. Family Size (FAMSIZ (Categorical 0 = (1 – 3), 1 = (4 – 6), 2 = (7 and above)).
Results and Discussions

I. Descriptive Statistics Results
Age of Respondents: It is taken as a categorical variable. According to the survey data, among the
respondents, 0.50% (2) of them aged below 20 years old, 19.02% (74) were between 21 and 30 years, 35.73%
(139) of them were aged between 31 and 40 years, 31.11 % ( 121) were 41 to 50 years old and 13.62 %( 53)
accounts above 50 years old.
Educational Status: Categorical; 51.41% (200) of the respondents completed Grades 11th to 12th, 16. 97% (66)
also had an educational status of Grades 7th to 10th, 13.88% (54) of respondents were Grade 1 to 6th completed,
6.68% (26) had vocational training, and 11.05% (43) had degree+ educational status at the survey time.
Marital Status: Categorized as married, single and divorced. Thus, among the respondents, 75.84 % (295) were married,
12.34 % (48) were single, 10.8% (42) of them were divorced from their husbands, and the rest 1.028 % (4)’s husbands
died during the survey period.
Family size: Family size was categorized from 1 to 3, from 4 to 6 and 7 & above. Based on the survey data,
57.58% (224) had a family size between 4 and 6, 41.9% (163) had 7 and above 10 families.
Table 1. Distributions of Demographic Characteristics of Respondents
Age category of Respondents Frequency Percentage Cumulative

Below and = 20 years 2 0.51 0.51
21 – 30 years 74 19.02 19.54
31- 40 139 35.73 55.27
41- 50 121 31.11 86.38
Above 51 53 13.62 100.00
Total 389 100.00
Educational Status
Grade 1-6 28 7.20 7.20
Grade 7-10 73 18.77 25.96
Grade 11-12 218 56.04 82.01
Vocational training 26 6.68 88.69
Degree and above 44 11.31 100.00
Total 389 100.00
Marital Status of respondents
Married 333 85.60 85.60
Single 19 4.88 90.49
divorced 32 8.23 98.71
widowed 5 1.29 100.00
Total 389 100.00
Family Size of respondents
1-3 2 0.51 0.51
4-6 224 57.58 58.10
7 and Above 163 41.90 100.00
Total 389 100.00
Source: Own Computation based on the survey data, 2021
Business Type, selection and Age of the Business.
Types of Business Engaged: In this study, the researcher categorized their activities as "café and restaurant,
Boutiques, Mini market, Spices, Beauty salon, shoe shops and others. Therefore, 31.36% (122) of them
engaged in Mini markets, 23.39 % (91) in Boutiques, 20.57% (80) had shoe shops, 5.66% (22) engaged in
women's Beauty salons, 11.05 %(43) in spices and others during the survey period in the study areas.
Year of Business started: Year of business started indicates the age of the business. As shown in Table 2,
5.14% of women entrepreneurs started their business recently (two years and recent), and 55% (214) of them
started their business before 5 years of the survey period. 24.68% (96) started before 10 years and 15% (59)
engaged in their existing business before 15 years.
Table 2. Occupation, and age, selection criteria and growth rate of the businesses.
Variables Frequency Percentage Cumulative
Types of Business Engaged
Cafe and restaurant 31 7.97 7.97
Boutiques 91 23.39 31.36
Mini market 122 31.36 62.72
Shoes shop 80 20.57 83.29
Beauty salon 22 5.66 88.95
Spices 18 4.63 93.57
Others 25 6.43 100.00
Total 389 100.00 100.00
Year of Business Started
Before 2 years 20 5.14 5.14
Before 5 years 214 55.01 60.15
Before 10 years 96 24.68 84.83
Before 15 years 59 15.17 100.00
Total 389 100.00 10.03
Business Selection criteria 39 7.85 4.11
Related with their profession 16 3.22 0.51
Not many people are doing it 2 0.40 84.06
By making market survey 327 65.79 27.76
Randomly without market analysis 108 21.73 0.00
Simple to start in capital and skill 0 0.00 1.29
New product/service in the market 5 1.01 127.76
Total 497 100.00
Growth rate of capital
0. No 126 32.39 32.39
1. Yes 263 67.61 100.00
Growth rate of Employment
0. No 127 32.65 32.65
1. Yes 262 67.35 100.00
Growth rate of the business
0. No 127 32.65 32.65
1. Yes 262 67.35 100.00
Business Selection Criteria:

The main objective of any business enterprise, directly or indirectly, is profit maximization. Their business
selection criterion depends on different aspects. As shown in Table 2, surprisingly, only a few followed formal
procedural business selection criteria. For example, 65.79% (327) started randomly, without making a market
survey. 7.85% (39) selected the business related to their profession and experience. 21.73% (108) selected by
its simplicity to startup, and 1.01% (5) used other methods. Only 0.40% (2) of the respondents started their
business by making a market survey and worked on the same business during the survey period.
Training, Working premises and Tax paying category
Table 3. Training, working premises Tax paying category, and problems
Variables Frequency Percentage Cumulative

Did you get training to start
your business
No 383 98.46 98.46
Yes 6 1.54 100.00
Total 389 100.00
Is your working premise
appropriate for market
No 300 77.12 77.12
Yes 89 22.88 100.00
Total 389 100.00
Is it your premise?
No 319 82.00 82.00
Yes 70 18.00 100.00
Total 389 100.00
Taxpayer category
A 148 38.05 38.05
B 183 47.04 85.09
C 58 14.91 100.00
Total 389 100.00
Problems faced when they started
Lack of initial capital 389 20.23 100.00
lack of working premise 389 20.23 100.00
Lack of skill 314 16.33 80.72
Lack of confidence 113 5.88 29.05
Difficult to promote 126 6.55 32.39
Gender biased problem 274 14.25 70.44
Market problem 282 14.66 72.49
Difficult to get business license 36 1.87 9.25
Total 1923 100.00 494.34

Training: The researcher asked women entrepreneurs whether they took different training related to their job
or not before they began their current businesses. Accordingly, 98.46% (383) did not get training before starting
the job. Instead, they gradually adopted the job. They also incurred higher costs due to low skill or knowledge
of the business they started. Sometimes they shut down their business due to a lack of skill and negative profit.
Accessibility to working premises: In this research, women entrepreneurs were asked about the location of
their working premises to customers and their ownership of it. Therefore, 77.12% (300) replied that they didn’t
perceive their working premises were appropriate. It is far from their home, far for their customers, or located at
the backside and not shown to customers, or it is located with no parking and display space, or it was not a safe
and secured place. Others also replied as they were working by renting.
Ownership of working premises: As mentioned in Table 3, 82% of women entrepreneurs did not have their
working premises; instead, they were running their business by renting from others, and some were selling on
public roads left and right sides.
Tax-paying category: In Ethiopia, taxpayers are divided into three main categories, taxpayer “A,” taxpayer
“B,” and taxpayer “C.” A body or any other person having an annual gross income of ETB 1,000,000 or more is
categorized as taxpayer “A”. If A person other than a body has an annual gross income of ETB 500,000 or more
but less than ETB 1,000,000, it is classified as taxpayer B. If a person other than a body has an annual gross
income of less than ETB 500,000, the taxpayer is categorized under taxpayer C. Among the respondents, 38%
(148) are under category “A”, 47% (183) were categorized as taxpayer “B”, and the remaining 15% (58) were
taxpayer “C”. Therefore, most of the respondents were under the category of taxpayer “B”.
Problems when they started their Business: Starting a new job or business is not a simple task in
developing countries, especially in Ethiopia. As a result, according to the survey data, 100% (389) of
respondents faced initial working capital and working premises problems, 80.72% (314) faced a lack of skill/
experience problems, 72.49% (282) could not get an appropriate market or customers, 70.44% (274) of the
respondents also reported as they faced gender-biased problems, 29.05 % (113) replayed as they did not have
the self-confidence to run the business by themselves, 9.25 % (36) of the respondents, faced bureaucracy to get
a business license from the local trade and industry offices.
Long lasting and Existing Problems for women Entrepreneurs
In this sub-portion, the researcher tried to see women entrepreneurs' problems during the survey period. As
shown in Table 4, it was tried to rank the main problems that women entrepreneurs faced during the survey
period. As a result, for 92% of the respondents, finance was their first problem during the survey. 55% chose
working premises and rental cost as their second problem; family burden and business conflict was the 3 rd rank
problem for 52% of the respondents. According to the survey data, COVID -19 was their 4th problem for 50 %
of them during the survey period. Fluctuation of inputs and outputs price in the market was ranked 5th for 47%
of women entrepreneurs. 46% of the respondents replied that less accessibility of infrastructures (like
electricity, purified water, road, internet…) in the area where they were working was the 6 th problem for them.
A higher tax burden was also considered the 7th rank problem for 32% of the respondents. Unfortunately,
during the survey period of this research, there was internal conflict and political instability in Ethiopia. As a
result, 31% of the respondents mentioned political instability and civil war as their 8th problem during the
survey period. Illegal and legal (seller of similar goods and services with lower prices) competition was also
mentioned as the 9th problem for 30% of women entrepreneurs. Generally, even though the degree of severity
was different, those discussed above and other problems were identified as the main growth constraints for
women entrepreneurs in the study areas.
Table 4. Main problems for women Entrepreneurs and source of finance and their perception for bank loan
Variables Frequency Percent of response Percent of cases
Finance Problem 358 21.18 92
working premises and rental cost 214 12.65 55
Family burden and conflict with business 202 11.95 52
Expansion of COVID -19 194 11.47 50
Fluctuation of inputs and outputs price 183 10.82 47
Less accessibility of infrastructures 179 10.58 46
Higher tax burden 124 7.33 32
Internal conflict & political instability 120 7.10 31
High illegal and legal competition 117 6.92 30
Total 1691 100.00
Source of initial capital
personal saving 13 3.34 3.34
From family 325 83.55 86.89
Loan from friends and relatives 16 4.11 91.00
Loan from financial institutions 31 7.97 98.97
Loan from informal lenders 4 1.03 100.00
Total 389 100.00
Why didn’t women get loan from Banks Frequency Percent of response Percent of cases
They don’t know the procedure 6 0.45 1.54
It requires high value collateral 358 26.96 92.03
The interest rate is high 313 23.57 80.46
It is risky 226 17.02 58.10
Banks don’t rely on small women 341 25.68 87.66
Banks don’t lend at individual level 29 2.18 7.46
Their religion don’t allow to borrow 17 1.28 4.37
If other , specify 38 2.86 9.77
Total 1328 100.00
Sources of initial capital: Based on the survey data, 83.55% (325) of sample respondents got their initial
working capital from their families, 4.11% (16) got from friends and relatives, 7.97% (31) got from financial
institutions, 3.34% (13) got from personal savings and 1.035% (4) got from informal lenders. According to the
respondents' report, only a few got initial capital from formal financial institutions or banks.
Banks as sources of finance: During the research survey, Ethiopia had 18 operating banks, two of which were
governmental (Development Bank and Commercial Bank of Ethiopia. According to the respondents' report,
banks refused to lend to small business owners who lacked collateral to guarantee loan repayments, such as
women entrepreneurs and other low-income business owners. In this regard, the researcher gathered
information on how women entrepreneurs perceive bank lending criteria. 91 % (354) of participants replied that
banks don't lend to them when they need money, and only 9 % (35) said banks might lend to them if they want
to borrow. As a result, most women entrepreneurs had a negative impression about asking for and borrowing
money from banks.
The researcher gathered information from women entrepreneurs to know why banks refused to lend to them. As
a result, 1.54 % of respondents (6) replied that they did not know how to apply for a bank loan, 92.03% (358)
perceived as higher-value collateral is required, 80.46 % (313) of the respondents believed that the interest rate
is higher, 58.10 % (226) were risk averse to borrow from banks, 7.46 % (29) understood as banks could lend at
the individual level. Other 4.37 % (17) don't want to borrow from interest-bearing banks due to religious
conflict. The remaining 9.77 % (38) of respondents refused to take a loan from a bank for different reasons.
Measurement of Growth of Businesses and Source of initial working capital

Business growth measurement is complicated, and many aspects are included to measure it. The researcher
tried to measure the growth of women entrepreneurs' businesses using the growth rate of employees and capital
growth rate as indicators.
A. Employment Growth rate of women Entrepreneurs’
It is known that when a business grows, it hires more employees to expand its production and increases profit.
The employment growth rate is one proximate measurement of the growth of a business.
Note: If the initial no of employees was zero, the researcher calculated the annual average growth rate by
dividing the current no of employees by the age of the business to avoid zero on the denominator in equation 3
(Liedholm, 2002; Lafuente & Rabetino, 2007).
Based on equation (11) and the survey data, the annual average growth rate of women entrepreneurs’
businesses measured by the growth rate of employment was only 0.685%. The minimum growth rate was
negative (-20%), and the maximum was 50%.
B. Measuring Capital Growth rate
Capital growth is the appreciation of the value of an asset over time. It is usually calculated and presented on
an annual or Year-on-Year basis in the form of a percentage. The researcher used the general formula of
compound interest to know the growth rate of women’s enterprises in terms of capital (equation 12).
By equation (12) and the survey data, the annual average growth rate of capital was 7.4%, with a minimum of
5.3% and a maximum of 13.4%.
II. Econometrics Models and Results
(Using equations 8). The regression coefficients indicate the extent of the effect in the log odds, being the
category of interest of the response variable for a unit change in the predictor variables. If the value of the odds
ratio is positive (exp (B) >1), the chance of growth of women’s enterprise is higher for a member of the group
in the reference category. The reverse is true when the odds ratio is less than 1 (exp (B) <1) about the reference
category (Pituch & Stevens, 2015); Walker, 1996).
Table 5. Logistic regression model results for the constraints for the growth of women entrepreneurs.
Logistic regression Number of obs = 389

LR chi2(24) = 408.96
Prob > chi2 = 0.0000
Log likelihood = -41.233733 Pseudo R2 = 0.8322
Groth_of_Business Odds Ratio Std. Err. z P>|z| [95% Conf. Interval]
ACFIN
1. Yes 22.35185 16.60772 4.18 0.000 5.210261 95.88871
ACRAWM
1. Yes 3.502562 2.376334 1.85 0.065 .9265803 13.24002
STIFCOM
1. Yes .1749679 .1677381 -1.82 0.069 .0267257 1.145481
EDUN
1. Grade 7-10 547.7996 6257.697 0.55 0.581 1.04e-07 2.90e+12
2. Grade 11-12 134.0899 236.0491 2.78 0.005 4.255583 4225.065
3. Vocational training 11.28549 22.17126 1.23 0.217 .2400303 530.6094
4. Degree and above 189.8763 401.6151 2.48 0.013 3.006489 11991.73
MARTSTAT
1. Single .0612866 .0658129 -2.60 0.009 .0074696 .5028434
2. divorced .0777559 .0828763 -2.40 0.017 .0096267 .6280411
3. widowed .2936734 .6994682 -0.51 0.607 .0027573 31.27863
ACTRAIN
1. Yes 23.30195 21.3132 3.44 0.001 3.880058 139.9415
ACCINFRA
1. Yes 16.29877 13.91848 3.27 0.001 3.056776 86.90523
ACCWOKPREM
1. Yes 5.230089 3.646519 2.37 0.018 1.333628 20.51083
ACCINFOMOTECH
1. Yes 6.314919 5.737648 2.03 0.043 1.064089 37.47639
TAXBURDN
1. B 13.08498 10.00342 3.36 0.001 2.924375 58.54816
INICAPTA 1.000039 .0000122 3.23 0.001 1.000015 1.000063
AGERSPOND
1. 21 - 30 16.66125 98.23557 0.48 0.633 .0001596 1739542
2. 31- 40 75.91975 966.4572 0.34 0.734 1.11e-09 5.20e+12
3. 41- 50 214.4059 2735.31 0.42 0.674 2.96e-09 1.55e+13
4. Above 51 31747.3 409911 0.80 0.422 3.25e-07 3.11e+15
AGEBUSINE
1. Before 5 years 2.123951 2.160862 0.74 0.459 .289168 15.60051
2. Before 10 years 8.508031 15.4851 1.18 0.239 .2402115 301.3452
3. Before 15 years 2.968488 6.023358 0.54 0.592 .0556369 158.3828
FAMSIZ
1. 4 - 6 .9239499 1.078957 -0.07 0.946 .0936794 9.11282
2. 7 and above 1 (omitted)
_cons 3.51e-07 4.54e-06 -1.15 0.250 3.45e-18 35781.32

When odds ratio < 1(B= coefficient is negative) then the odds (or the likelihood) of not growing a business is
higher for the reference category.
Availability of access to finance increases the probability of the growth of their firms by 22 times compared to
those women entrepreneurs who do not have access. The relationship level was statistically significant at 5%
(p = 0.00; H1).
Access to raw materials and inputs or finished products for resale purposes nearer to their working premises
improves the probability of the growth of their business by 3.5 times compared to those women entrepreneurs
who do not have access. It is statistically significant at 10% (p = 0.065; H2).
According to the respondents' report, stiff competition indicates the existence of unfair competition. According
to the regression result, when there is stiff competition with women an entrepreneur, the likelihood of their
business growth reduces by 0.175 times compared to proper completion. The variable's regression coefficient is
0.175 and is negative (when odds ratio < 0), and the relationship level was statistically significant at 5% (p =
0.069; H3)
The level of education has an impact on the probability of growth of women entrepreneurs. As a result, a degree
holder or higher level of education has 189.87 times greater chance of growing their business than grade 1- 6th
holders. In conclusion, the alternative hypothesis, that there is a positive and statistically significant relationship
between the growth of women's businesses and their educational status, is accepted due to the null hypothesis
being rejected (H4).
Businesses owned by single women entrepreneurs had 0.06 times lower chance of growth than businesses
owned by married women entrepreneurs. Therefore, the alternative hypothesis that the marital status of
respondents' affects the growth of women's businesses is statistically significant and is accepted due to the null
hypothesis being rejected (H5).
Access to training when women entrepreneurs started their business and at the time of working was
hypothesized to affect the growth of women's businesses. Getting different training increases the probability of
women entrepreneurs' business growth on average by 23 times compared to those women entrepreneurs who
did not have training access; (H6) is rejected.
Access to infrastructures improves the probability of the growth of their businesses by 16 times compared to
those women entrepreneurs who do not have access. It is statistically significant at 1% (p = 0.001; H7 is
rejected).
Compared with those who did not have their working premises, having working premises increases the
probability of the growth of their business by 5 times. It is statistically significant (p = 0.018), and the null
hypothesis is rejected (H8) in favor of the alternative.
Accessibility to information and modern technology for women entrepreneurs increases the odds of the growth
of their businesses by 6 times compared to those women entrepreneurs who did not have access. It is
statistically significant at 5% (p = 0.043) and (H9) is rejected.
When women entrepreneurs pay fair tax, the odds of the growth of their enterprises incrases by 13 times as
compared with those women entrepreneurs who paid over tax rate. The relationship level was statistically
significant at 5% (p = 0.001; H10). This shows that a high tax burden negatively and significantly influences the
odds of the growth of women's enterprises in the study area.
As shown in table 5, the likelihood of the growth of women's businesses increases when their initial capital
increases. The relationship level was positive and statistically significant at 1% (p = 0.001). This shows that a
higher initial capital positively and significantly influences the odds of the growth of women's enterprises in the
study area.
Among the included independent variables, age of the respondents, age of the business and family size were
statistically insignificant to influence the growth of women entrepreneurs in the study area.
Summary and Conclusion

According to the survey data, 100% (389) of respondents faced initial working capital problems and appropriate
working premises. Finance, working premises and rental cost, family burden and business conflict, COVID -19,
fluctuation of inputs and outputs prices, less accessibility of infrastructures, a higher tax burden, conflicts and
political instability, higher illegal and legal competition were identified as the main growth constraints for
women entrepreneurs in the study areas.
The annual average growth rate of women entrepreneurs' businesses measured based on the growth rate of
employment was 0.68%, with a minimum of - 20% and a maximum of 50%. On the other hand, the annual
average growth rate of women entrepreneurs' businesses measured by capital growth rate was 7.4%, with a
minimum growth rate of 5.3% and a maximum of 13.4%. The average initial working capital was 45,685 ETB
with a minimum of 2,000 and a maximum of 150,000 ETB.
Among the included independent variables, except family size and age of respondents, all other variables are
statistically significant and influence the growth of women entrepreneurs.
Formulating an appropriate intervention for transforming the status of women both within and outside their
homes has to be one of the significant preoccupations of development practitioners. Strategies should be
formulated to raise women's status through education, training, access to finance and family and business
management, and access to legal counseling. Politically, has to be made to raise the proportion of female
participants in representative organizations. There should be financial institutions that supply finance,
especially for women, with less bureaucracy and smooth services, led by women.
Cultural values and gender-related constraints should be withdrawn for women. Husbands' and other family
members' support should be significant to simplify the multiple roles of women entrepreneurs. Lack of self-
confidence is better avoided through training and experience sharing.
Generally, the government, non-governmental organizations, and other stake holders should participate actively
and positively participate in supporting women entrepreneurs. Especially banks and small micro finances
should supply working premises and finance for women entrepreneurs. They are almost half of the society.
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© 2022 IJRAR August 2022, Volume 9, Issue 3 www.ijrar.

org (E-ISSN 2348-1269, P- ISSN 2349-5138)

Constraints for the Growth of women Entrepreneur

Statements of the Problem

A hypothesis is a tentative relationship or testable assumption/prediction/conjecture between two or more

Econometrics Model Specifications and Variables

reduction relative to the reference period, we took it as "no growth/ reduction".

Measurement of growth of Women’s enterprises

Results and Discussions

Age category of Respondents Frequency Percentage Cumulative

Source: Own Computation based on the survey data, 2021

Business Selection Criteria:

Table 3. Training, working premises Tax paying category, and problems

Variables Frequency Percentage Cumulative

Source: Own Computation based on the survey data, 2021

Measurement of Growth of Businesses and Source of initial working capital

B. Measuring Capital Growth rate

II. Econometrics Models and Results

Logistic regression Number of obs = 389

Groth_of_Business Odds Ratio Std. Err. z P>|z| [95% Conf. Interval]

_cons 3.51e-07 4.54e-06 -1.15 0.250 3.45e-18 35781.32

Source: Own Computation based on the survey data, 2021

Summary and Conclusion

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