Factors Affecting the Profitability of Micro and Small Enterprises in Agaro Town

Abstract

The main objective of the The study was investigated that, factors affecting the profitability of MSEs in five sectors (constriction, manufacturing, urban agriculture, service and trade) in Agaro town .and the specific objective of this study assessed some internal and external factors and how these factors affect the profitability of MSEs as well as the source of finance of MSE on the these sectors in addition to that the study assessed how socio demographics of the owners affect the profitability of MSEs. The researcher used stratified sampling technique to minimizing bias. In the research area, the population was 690 and the researcher took 142 samples proportionally allocated to each stratum. The researcher collected primary data by using semi-structured questionnaires and the questionnaires contain both open-ended and close ended questions. These questionnaires have been also in English language and they were translated in to Amharic for data collection. For method data analysis SPSS version 20 software was used. In this study both inferential and descriptive statistics were used. Descriptive statistics such as percentage, mean, sum, chart and frequency distributions has been used. The findings of the study show that , problem of acquire new technology and inadequate market availability affect the profitability of MSEs negatively. On the other hand, sex), educational status , marital status (married), and accessibility of training facilities affect the profitability of MSEs positively in the study area. In relation to the main sources of startup and expansion finance or funds, for most MSEs the sources for finance were micro finances and family. As the result indicated, personal saving and banks were fewer contributors when compared to others and the researcher recommended various stakeholders like MSE owners, the town administration MSE coordinating office, Agro town municipality, new MSEs, credit associations and other researchers upon his finding