Factors Affecting performance Of Micro And Small Enterprises:-The Case Of Limu Seka Woreda

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.