Abstract:
The micro and small enterprises (MSEs) sector faces numerous challenges regardless of its wide
contribution to the socio-economic development through creating employment opportunity,
generating income for the poor and poverty reduction. The literature shows that a very small
fraction of MSEs are successful, and still there is a gap to minimize this challenge. Hence, the
primary aim of this study was to identify the factors affecting the growth of MSEs in Jimma city
engaged in five sectors of business activities in all part of the city. From the total of 7,640 MSE’s
registered as of September 2015 in Jimma city 317 respondents was selected through stratified
sampling method were focus of the study. For the achievements of the objectives of this study,
data were obtained from both primary and secondary sources. Primary data were collected
through questionnaires and interviews and secondary data were obtained via review of related
documents from offices, internet and library sources. To analyze the collected data through
statistical analysis such as, descriptive analysis (central tendency and dispersion) and inferential
analysis (correlation and binary logistic regression model) were applied. From the analysis, the
researcher find out that, the three predictor variables namely; financial, infrastructural and
market related factors significantly affected the growth of MSEs in Jimma city. Finally, the
researcher recommends that the micro and small enterprises (MSEs) development agency of
Jimma city should radically solve the problems posed by these factors by working hard with the
respective governmental offices and non-governmental organizations with MSEs in the city in
which all these parties contribute their parts and make them responsible to ensure the
development of MSEs in Jimma city
