Abstract:
This study examined factors affecting performance of micro and small enterprises: The case of
Limu Seka woreda. In this study, data were collected from both from primary and secondary
sources. Primary data were collected by multistage sampling methods selected from 187
owner/manager and woreda officials and experts of MSEs by using close ended questionnaire
and interview. A multi linear regression model and different types of statistical methods
including descriptive statistics like mean and standard deviation of the respondents, and
inferential statistics was used to understand the relationship between each study variables and to
analyze factors that affects performance of MSEs. A total of six explanatory variables were
included in the regression. All of the six variables were found to significantly affect performance
of MSEs. The multi linear regression result showed that the variables hypothesized to affect
performance of MSEs were; job attitude factors, management related factors, financial factors,
technological factors, infrastructure factors and market linkage factors have statistically
significant effect on performance of MSEs. Therefore to improve the performance of MSEs, Key
Performance Indicator (KPI) performance measurement techniques and new improvements
should be introduced in MSEs policy and strategy evaluation matrix and way of business
achievement to increase MSEs efficiency and effectiveness. In addition the Industry and
Enterprise development office in collaboration with TVET office and Micro finance institutions
should endeavor for the MSEs to have better attitude for their job and devote more in working
with technical and vocational education training to solve skill gaps of MSEs’ owners/managers
as well as financial problems of the MSEs and the regional and woreda government should pay
attention to the improvement of technology and infrastructures.
