Factors affecting the growth of micro and small enterprises in the case of Jimma city

Abstract

The micro and small enterprises (MSEs) sector faces numerous challenges regardless of its wide contribution to the socio-economic development through creating employment opportunity, generating income for the poor and poverty reduction. The literature shows that a very small fraction of MSEs are successful, and still there is a gap to minimize this challenge. Hence, the primary aim of this study was to identify the factors affecting the growth of MSEs in Jimma city engaged in five sectors of business activities in all part of the city. From the total of 7,640 MSE’s registered as of September 2015 in Jimma city 317 respondents was selected through stratified sampling method were focus of the study. For the achievements of the objectives of this study, data were obtained from both primary and secondary sources. Primary data were collected through questionnaires and interviews and secondary data were obtained via review of related documents from offices, internet and library sources. To analyze the collected data through statistical analysis such as, descriptive analysis (central tendency and dispersion) and inferential analysis (correlation and binary logistic regression model) were applied. From the analysis, the researcher find out that, the three predictor variables namely; financial, infrastructural and market related factors significantly affected the growth of MSEs in Jimma city. Finally, the researcher recommends that the micro and small enterprises (MSEs) development agency of Jimma city should radically solve the problems posed by these factors by working hard with the respective governmental offices and non-governmental organizations with MSEs in the city in which all these parties contribute their parts and make them responsible to ensure the development of MSEs in Jimma city