Abstract:
This study was conducted in Nedi Gibe district Jimma zone. The main objective of this study
was to assess the role of micro and small enterprise in reducing poverty in urban area. The
study was employed mixed research design. Micro and Small Enterprises (MSEs) have
significant role to job creating, generating income, and poverty reduction. However, the
performance of MSEs in Dimtu town is low. So, this study was done to investigate the
determinants of MSEs Performance in Dimtu town using descriptive statistics. Both primary
and secondary data were also employed in getting the necessary information for the analysis
of the study. A total of 223 sample respondents were identified using Simple random sampling
technique. The result of the study shows that the majority of the MSEs have been a recent
establishment and faced challenges of inadequate startup capital, government policies and
regulation related factors, limited infrastructure, corruption, lack of training, limited access
to finance, poverty, attitude of work, cultural back ground and lack technology. Furthermore,
the study also noted that most of the operators were found to be young labor force of male
operators with educational qualification of high school or less. The finding supports that
insufficient start up, low women participation, unfair distribution of infrastructure, low follow
up negative attitude on MSEs Affect the performance of MSEs. Therefore the government
official, local administration and all stake holders should have do on these problems.
