An Analysis of Women-Owned Micro Business Performance and the Effect on Poverty in the Wolaita Zone, Southern Ethiopia

Ethiopia is Africa's second most populous and one of the world's poorest countries. Women in Ethiopia are more likely than men to be poor. To reduce urban poverty, the Ethiopian government implemented anti-poverty and development programs that mostly targeted the micro- and small-business sectors. Women from low-income and economically disadvantaged backgrounds dominated this business field. Because micro-businesses require less startup capital than small businesses, most Ethiopian women own and operate them. This study set out to investigate women's micro-business participation decisions and their effect on poverty in southern Ethiopia, Wolaita zone, by addressing the following specific objectives: to assess the status and determinants of poverty among women who owned these micro-businesses, to investigate the performance determinants for women-owned micro-businesses, and to investigate the effect of women's micro-business participation on poverty. A cross-sectional survey was carried out using a sequential mixed-methods research approach. Women were chosen for quantitative and qualitative data utilizing stratified and systematic random selection approaches, as well as purposive non-random sampling strategies. In 2020, 384 female micro-business owners-leaders were surveyed for quantitative data, and 36 additional female micro-business owners-leaders participated in focus groups and in-depth interviews to gather qualitative information. Data were analyzed using the Foster-Greer-Thornback poverty indices, logistic regression analysis, propensity score matching, and multiple linear regression models. Thematic analysis was utilized to analyze data from focus groups and interviews. This study discovered that push factors such as poverty, unemployment, and other socioeconomic and demographic factors inspire women to participate in micro-businesses. This study finding showed that women-owned micro-businesses had a positive average monthly gross profit trend. It was observed that the poverty status of the women who owned micro-businesses in the study area varied and eight of the 14 poverty determinant factors were found to have a significant effect on women’s poverty. This study discovered that women who ran registered micro-businesses had higher annual food, non-food, and overall adult equivalent expenditures than women who ran unregistered micro-businesses. Rather than providing food, clothing, and/or other aid to women in disadvantaged communities, an author asserted that assisting women and their micro-businesses allows them to be self-sufficient in terms of food and clothing as a long-term solution to poverty reduction (poverty resilience women). As a result, policymakers can use these findings to gain a better understanding of how women's micro-entrepreneurship affects poverty reduction, allowing them to develop more effective anti-poverty initiatives. This study's findings are novel and add to the body of knowledge in Ethiopia and the Sub-Saharan African region.