This study was undertaken to explore factors that hinder women entrepreneurs who are engaged in micro and small enterprises in Bahir Dar City. To this effect the study provides information on the factors that deter women entrepreneurs in starting and growing their businesses in Bahir Dar by taking 50% of population as a sample. Female respondents who were engaged in micro and small enterprises were randomly selected from the five kebele. Questionnaires with both close-ended and few open-ended questions were prepared and distributed. The questionnaire consists of business related issues such as the type of business, ownership types, sources of starting capital, starting capital, current capital, reasons of starting business, the profitability of business, problems encountered at all stages of business. The data have been analyzed mainly using percentages presented in tables. Lack of starting and working capital was clearly stated as a major barrier to growth by many of the women entrepreneurs. The main objective of the study was to finding out the possible solutions for the various challenges faced by women entrepreneurs in garment micro and small enterprises in the selected area an