FACTORS AFFECTING THE GROWTH OF MICRO AND SMALL ENTERPRISES: A CASE OF GUBRE SUB-CITY

Abstract

Micro and Small Enterprises (MSEs) play an important economic role in many countries and recognized as an important vehicles of economic diversification, employment creation, income generation and distribution, and poverty alleviation. MSEs occupy a prominent position in the development agenda of many developing countries like Ethiopia. Currently, in Ethiopia, the government has been promoting the development of MSEs through the formulation and implementation of Micro and Small Enterprises Development Strategyand the number of MSEs in the country is steadily growing. But, much more important than increase in their numbers, their current status, stage and pace of development is significant because most MSEs are hibernated from growing and faced with the threat of failure due to many factors. Little research exists that examines these factors influencing performance of MSEs in developing countries, especially in Ethiopia. In our research we tried to identify the factors that influence the growth of MSE in Gubre sub-city and make some statistical analysis and according to our result the findings indicate that the growing MSE is associated with sex, education level, age, infrastructure and working premise. However, age, sex education level has statistically significant association with growth of MSE. On the other hand from the result of binary logistic regression it can be concluded that the factors such as with infrastructure and working premise had not significant effect on growth of MSE.