Factors Affecting Micro And Small Enterprises performance:A Case Study Of Jimma Tawown

Abstract

Micro and Small Enterprise is prioritized as important means of economic development, job creation, income generation and equity distribution as indispensable poverty reduction. The performance of these enterprises is determined by different key factors that have to be assessed. The main objectives of this study is to assess the factors affecting micro and small enterprise performance. Data was collected from literatures, government authorities and primary data by from field survey. The sample size of 343 number of enterprises were selected from the total of 2420 that include manufacturing, trade, service, urban agriculture and construction sector. The questionaries’ were prepared based on eight main factors. These factors were financial, marketing, technological, entrepreneurial, politico-legal, working place, managerial and infrastructural factors. The IBM SPSS statistics 20 was used for analysis purpose and it was analyzed by both descriptive statistics and also inferential statistics. From the analysis the influence of each factor was calculated using mean. The financial factor lead the all factors by large amount of influence. Where the other factors according to their rank depending on mean were technological factors, working place factor, infrastructural factors, politico-legal factors, entrepreneurial factors, managerial factors and the marketing factor ordered from second to the last rank respectively. The regression analysis indicated that a one unit increase of marketing, entrepreneurial, technological, managerial, financial, politico-legal, working place and infrastructure add the performance in 0.123, 0.12, 0.125, 0.121, 0.127, 0.111, 0.116 and 0.123 unit respectively. The result indicated that all the selected factors have an impact on the enterprise performance development and there were a problem in each factor that was tackle to the enterprises better achievements. For future improvement of the current sector problems all the concerned bodies such as enterprises operators and managers, government bodies and researchers should work together.