The Effect of Business Development Services on the Performance of Micro and Small Enterprises in Jimma town

Abstract

The traditional ways of planning, performance monitoring, and services evaluation are insufficiently responding to the macroeconomic developments and environmental interventions of most governments. However, a growing number of governments are working to improve their economies by creating systems that positively impact their performance status. Sustainable economic growth along with low level rates of unemployment are the major components for the macroeconomic development of nations. The main objective of the study was to investigate the effect of Business Development Services on the Performance of Micro and Small Enterprises those involved in different business sectors in Jimma town. The study was employed both descriptive and explanatory research design with qualitative and quantitative study approach. The population of the study was 2906 enterprises in Jimma town from seven enterprise sectors namely; Service, Manufacturing, Construction, Urban agriculture, mining, livestock and Trade. Then, a total of 352 samples were drawn. Stratified and the proportional allocation method was used to select sample from each sector. The study was used mainly primary sources of data supported by secondary data to collect relevant information for the study. The study was employed self-administered survey questionnaires and semi-structured interviews as tools in gathering primary data of the study. To analyze the data collected from the respondents both descriptive and correlations & multivariate linear regression inferential statistics analysis were applied to come to conclusions and make predictions based on the collected data. An examination of these five independent variables indicated that the training services represented the strongest effect on MSE performance as with the standard beta of 0.372 followed by Technical Service on MSE performance as it interacted with independent variables with beta of 0.200, Networking Service with standard beta 0.168, Market Access 0.125 and Managerial Skills with β of .096. Thus the statistical results prove that positive and significant linear relationships exist between dependent and independent variables except insignificant relationship between Managerial Skills with MSE performance. According to this study the training session given to MSEs’ in Jimma town couldn’t intensively addressed regarding basic risk management skill & Basic business management skill. However, it’s mainly focus on the investment skill. The technical services which have a possibility to enhance the business performance. It has been strengthen the service given through focusing on the consultancy provision on the study area.