Challenges and Opportunities of Micro and Small Enterprises Development in Agaro Town, Southwest Ethiopia

Abstract

The purpose of this study was to investigate the challenges and opportunities in the development of MSEs in Agaro town. In the study, both qualitative and quantitative research methods were used for this research. The study adopted descriptive survey and cross-sectional design. The study employed stratified sampling and simple random sampling to collect data from 247 MSEs. In order to collect data, questionnaire and interview guide were employed as data collection instruments. Data were collected from primary and secondary sources. Descriptive data analysis method was used to analyze the gathered data with the help of SPSS software version 20. Data presented in tables and pie-charts. Chi square was also used to estimate the degree of association between the dependent variable and some independent variables .The study found that MSEs have been confronted with a number of challenges that obstructed their growth and expansion. In particular, the study had found inadequate infrastructure facilities, poor managerial and technical skills, and inadequate working premises, poor social capital (Business Networks, lack of access to information, lack of access to innovation and lack of access to Finance) are the major challenges that deter MSE’s development. Moreover, marketing problems, low support from respective institutions, inadequate supply of raw materials, and regulatory and institutional issues are the main challenges that affect the growth and expansion of SMEs of the study area. The study also revealed that the MSEs in the study area had created considerable employment opportunities for unemployed youth and contributed their part in boosting the incomes of households as well as personal savings. In addition to this easy to start the business, extensively supported by government and business opportunities were identified as an opportunities for MSEs in the study area. In line with the findings obtained from this study recommendations to respective governmental bodies and MSE’s operators/managers have been forwarded.