DETERMINANTS OF MICRO AND SMALL SCALE ENTERPRISES’ PERFORMANCE IN BURAYU TOWN

Abstract

The Government of Ethiopia is focusing on the MSEs sectors for its role in job creation and Poverty reduction. The focus stems from the increasing of unemployment and poverty problem. The objective of this study is, therefore, to identify factors that determine Micro and Small enterprises performances. The study used both Primary data and secondary data. The survey method involved 100 SMEs. The sample was taken from formally registered MSEs by the Burayu Town Trade and Industry Bureau. Among the registered SMEs, Town Agriculture, Industries, Services and General Construction, work enterprise were selected based on a combination of high proportionate share and economic importance. A sample of 100 MSEs engaged in 5 sectors was taken for the study using stratified random sampling. In the process of answering the basic questions, a questionnaire that include demographic profiles, Economic factors of MSEs, and determinant factors that affect the performance of MSEs designed in a closed ended and likert scales. After the data has been collected, it was analyzed using simple statistical techniques (tables and percentages) and descriptive statistics. The results of the study indicate the individual characteristics of MSEs, importance of MSEs and the determinants of performance that shows access to finance, training and man power development, market opportunity and skills and managerial efficiency. The study found that there are micro finance institutes and other lending institutes which are willing to give awareness to MSEs how to manage the finance and to give training. TVETs provide technology, machine maintenance, technical skill training and facility supports, cooperation in the areas of business related, financial and manpower development trainings are poor. Based on the major findings, recommendations are forwarded to existing and potential members of MSEs in Burayu Town, Trade and Industry Office of Burayu Town, Micro finance institutes, and to TVET centers.