Factors Affecting the Growth of Micro and Small Enterprises: the Case of Asella town.

Abstract

The main objective of the researchis to assessing the factors affecting the growth of MSEs in Asella town. For the sake of achieving this objective the researcher uses the descriptive research to describe the state of affairs of primary data resultsfrom the questioners and explanatory research that helps to explain interviewas well as observation from secondary data results,primary sources of data were collected through structured questionnaire from a sample of 297 MSEs that were selected from 14‘kebeles’ in ‘Asella’ town, Ethiopiathrough stratified random sampling techniquewith a special emphasizes on textile and garment, food processing, wood and metal work, retail trades and service rendering sectors. The respondents of the questionnaire were selected from all enumeration Areas that have been clustered into micro and small enterprise and stratified according to the nature and size of the business they engaged in and the researcher has used Proportionate random sampling to select the respondents.Moreover, face-to-face interview was also conducted with 3 Coordinators of town MSEs Development agency as well as 20 selected MSEs operators in the town. Besides, the interview questions and observation of secondary data were analyzed using descriptive narrations through concurrent triangulation strategy.The data that have been gathered through questionnaire were analyzed using both descriptive and inferential statistics with the help of SPSS Version 21 Software for Windows. The study further indicate that, there exists linear and positive significant ranging from substantial to strong relationship was found between independent variables and dependent variable. Moreover, the selected in dependent variables may significantlyexplain the variations in the dependent variable at 5% level of significance.To see the effect of explanatory variables on the explained (dependent) variable, Multiple Regression Model was used. Accordingly, the regression analysis result revealed that the selected independent variables significantly explained the variations in the dependent variable at 95% confidence interval, as shown by adjusted R Squared of 85%. The empirical study elicited six major variables which affect the growth of MSEs in the study area (Asella town).The majorDescriptive findings of MSEs in relation tostudy variables indicate that entrepreneurfactors has a great influence with aground mean of 4.36.The next finding under a variable of financialrising factors with a mean of (4.33) indicate that the extent of effect it has on MESs growth and financial control factors (4.3),marketing factors (4.26), financial planning factors (4.25) and infrastructural factors (4.2) are factors which have an effect on growth of MSEswitha great extent of severity.Based on findings, the researcher recommendedgovernment bodies to fill the skill gap they have,to integrate with other supportive organization which help them in perspectives of variables under study andsolve great external factor raised from the angle of infrastructure obstacle.The operators also recommended in order to achieving their goal with good efficient and effective operational strategy.Suggestions for researchers also forwarded to broadening the researchable area of the enterprise.