Abstract:
The main objective of the The study was investigated that, factors affecting the profitability of MSEs
in five sectors (constriction, manufacturing, urban agriculture, service and trade) in Agaro town .and
the specific objective of this study assessed some internal and external factors and how these factors
affect the profitability of MSEs as well as the source of finance of MSE on the these sectors in
addition to that the study assessed how socio demographics of the owners affect the profitability of
MSEs. The researcher used stratified sampling technique to minimizing bias. In the research area,
the population was 690 and the researcher took 142 samples proportionally allocated to each
stratum. The researcher collected primary data by using semi-structured questionnaires and the
questionnaires contain both open-ended and close ended questions. These questionnaires have been also
in English language and they were translated in to Amharic for data collection. For method data
analysis SPSS version 20 software was used. In this study both inferential and descriptive statistics were
used. Descriptive statistics such as percentage, mean, sum, chart and frequency distributions has been
used. The findings of the study show that , problem of acquire new technology and inadequate market
availability affect the profitability of MSEs negatively. On the other hand, sex), educational status ,
marital status (married), and accessibility of training facilities affect the profitability of MSEs positively
in the study area. In relation to the main sources of startup and expansion finance or funds, for most
MSEs the sources for finance were micro finances and family. As the result indicated, personal saving
and banks were fewer contributors when compared to others and the researcher recommended various
stakeholders like MSE owners, the town administration MSE coordinating office, Agro town
municipality, new MSEs, credit associations and other researchers upon his finding
