Abstract:
Small and Micro Enterprises (SMEs) play an important economic role in many countries of the
world. Over the past 10 years, economic planners have realized the importance of the small
enterprises in achieving economic development. SMEs occupy a prominent position in the
development agenda of many developing countries like Somaliland. Currently, In Somaliland,
the Government has been promoting the development of SMEs through the formulation and
implementation of Small and Micro Enterprises Development Strategy, but some enterprises fail
to sustain, and some others remain for a long period of time without transforming into middle
level enterprise. The purpose of the study is therefore to assess the factors influencing the
performance of small and micro enterprises, in Hargeisa town, Somaliland. Primary data were
collected from a sample of 198 randomly selected SMEs engaged in Electronics,
Boutiques/clothes shop/tailoring, Transport, Supermarket and Retail shop, through structured
questionnaire by using stratified random sampling techniques. Data were analysed using
descriptive and inferential statistics with using a Statistical Package for Social Science (SPSS
version-23). Specifically, multiple linear regression analysis was carried out to examine the
variation in the performance of enterprises related to the variation in each of the independent
variables of the study. The results show that the performance of small and micro enterprises is
determined by age of the respondent, education level of respondents, business type, preparing
plan for future operations, record keeping and financial control system, management experience
for business and marketing related skill, but being male or female and being one or more than
one ownership have no effect on capital change. Based on the result we can recommend that
stake holders of the sector should work on preparing training programs on management issues
and creating experience sharing opportunities especially to those enter into the sector without
any management experience. Similarly based on the result we can recommend SMEs should start
using plan to their business activities and also adopt a formal record keeping and financial
control system in their internal practice.
