DETERMINANTS OF THE PERFORMANCE OF MICRO AND SMALL ENTERPRISES: A COMPARATIVE STUDY AMONG SELECTED WOREDAS IN GURAGE ZONE

Abstract

This research aims to identify determinant of the performance of MSE’s comparative study with a special attention to manufacturing, service, urban agriculture, construction and trade sectors in Gurage zone selected woredas. For the sake of achieving the objectives of this study, questionnaires were analyzed using statistical analysis such as descriptive and inferential analyses. The information gleaned through questionnaire from a sample of 236 operators of MSE’s. The respondent operators were selected using stratified sampling technique. The data were collected from two sources such as primary and secondary. Primary data was collected through questionnaire. Secondary data was collected from written documents. The study used descriptive analysis, Pearson correlation coefficients and multiple linear regression analyses were used to investigate the relationship between variables and the influence of each factor on the financial performance of MSE’s. The quantitative data were analyzed using SPSS version 20. The finding of the study indicates that the major factors that affect financial performance of MSE’s which include: management and expertise skill, luck of infrastructures, problems of market, financing problems, working premise and technology. The findings further indicate that, there exists linear and positive significant ranging from substantial to strong relationship was found between independent variables and dependent variable. Moreover, the selected independent variables may significantly explain the variations in the dependent variable at 1% level of significance. Based on the findings, the researcher recommendations to government and the other concerned body have to give attention to minimize such kind of problems like power interruption, Insufficient and interrupted water supply, and Lack of sufficient and quick transportation service problems to improve the performance of MSE’s. Future researchers could incorporate other external and internal factors such as size of the enterprise, initial capital of the enterprise and also other factors to get more solutions to many issues arising.