DETERMINANTS OF THE PERFORMANCE OF MICRO AND SMALL ENTERPRISES IN ADDIS ABABA, THE CASE OF GULELE SUB-CITY ENTERPRISE

Abstract

This study aimed at examining the determinants of the performance of Micro and Small Enterprises in Gulele Sub city in selected textile manufacturing enterprises. In the study both qualitative and quantitative research method was used. Primary data was obtained using questioner. Secondary data was also collected from government office manuals, past works, official research documents and internet. Stratified sampling was used to select proportional number of samples from the study area. On the basis of the findings, the major internal and external determinants of the performance of Micro and Small Enterprises in Addis Ababa, Gulele Sub-City are entrepreneurship, management, access to finance, access to market, access to training and technology support, access to industry extension, access to work space, capital, profit, saving and employment size..The result of the study revealed that most MSEs accessed finance mainly from informal sources that the formal financial institutions have not been able to meet the credit needs of the MSEs. The internal factors including entrepreneurship and management capability of business owners and supervisors were found to be medium. The external factors including access to market, access to training and technological support, and access to industry extension for MSEs sector development are not effectively implemented in line with their intended objectives. Enterprises are facing challenges concerning with supply of inputs and raw materials. Finding a stable market place to sell their product was also another challenges faced by those enterprise under this study. It is also found out that enterprises are lacking major skill training that is needed to boost their business. The finding emerged from investigation that there exists significant positive relationship between the dependent variable and independent variables. It is recommended that the sub city micro and small enterprise office and woredas office under different department should take the most part in Simplifying role by reviewing all difficulties faced by MSEs with respect to the factors analyzed under this study. These stakeholders should address issues raised by MSEs through an applicable policy and a continuous follow up that could promote the sector.