Determinants of Ethiopian Rural Women Performance in Entrepreneurial Activity: TheCase of Rural Women Entrepreneurs in Tigray

Abstract

The objective of the study was to investigate determinants of Ethiopian rural women’s participation in entrepreneurial activity. Two-stage sampling was employed: cluster of Zones according to the number of rural women engagement in the entrepreneurial activities and simple random sampling to select districts. The selected districts were Ofla, Atsbi, and Nebelet from Southern, Easter and Central zones respectively. Ordinary least square regression model was used to explain how variation in the outcome variable depended on the variation in a predictor’s variable. Based on the finding, interest-free loans as startup capital used to be acquired from relatives. Women entrepreneurs were thus left to rely on informal sources of finance such as Equb (traditional rotating savings system) and relatives. The study found that educational level and initial capital were important determinants of profit in the rural businesses owned by women. Market distance was also a pivotal determinant factor since those near to markets were better to enjoy higher profit since intermediaries were minimized among others. Those who manage to sell in big city and big market had strong profit margins due to their access to markets. The result also shows that despite limited access and lack of government support, micro finance institutions were essential in the success of entrepreneurial venture for rural women.