The Role of Micro and Small Enterprises in Employment Creation and Income Generation: A Case Study of Adyel Division, Lira Municipality, Lira District

Unemployment and low income are one of the present situations in Uganda. The government of Uganda has formulated a policy to mitigate the overwhelmed problem by fostering MSEs. In this report an attempt is made to assess whether MSEs create employment opportunities and income increase in Adyel Division, Lira municipality. During the study, primary data were collected from 14 owners and 32 employees and other participants of MSEs. Questionnaire and interview were used as data collection instruments. For data analysis, descriptive statistical tools such as tables, frequency distribution, percentage and graphs were used to describe the responses on the role of MSEs. The study revealed that there is growth rate of MSEs in Adyel division and the five year trend of MSEs, shows a slide difference in growth statistics. Regarding employment creation, MSEs created full time recruited job 42.86%, casual worker 3.71%, full time-self business 14.29% and part time-self business 7.14%. MSEs have great contribution to income. Most of the MSE owners (64.3%) their annual average of five years’ income fall in below Shs. 4,000 “000” (28.6%). The three sectors income also differs from each other. Most of the MSEs also face constraints during operation and start up time and the major constraints are in their order is financial shortage and unable to get access and affordable house rent. To conclude MSEs have great contribution in reducing unemployment and in providing income to those owners and employees of MSEs. Based on the major findings a number of policy recommendations are drawn. Among these, access to credit has vital role in growing MSEs. Giving work place and business development service would help MSEs to produce and sell products effectively.