FACTORS AFFECTING ENTREPRENEURIAL PARTICIPATION IN MICRO AND SMALL ENTERPRISE IN KOLFE KERANYO SUB CITY

Abstract

This research aims to investigate factors affecting entrepreneurial participation of micro and small enterprises with a special emphasizes on both service and industry sectors in kolfe keranyo sub city, Addis Ababa. The specific objectives of the study is to assess factors that affect the performance of small enterprises, assess factors affecting entrepreneurial participation of micro and small enterprises to assess the challenge and opportunity of micro and small enterprise. For the sake of achieving the objectives of this study, questionnaires were analyzed using the Statistical Package for Social Science version 20. The results of the data are presented in descriptive and in Ordinary List Square mode estimation. The information gleaned through questionnaire from a sample of 354 operators of small enterprises. The respondents were selected using stratified sampling technique. The independent variables for the study are gender, education, age, access to market, ease of regulation inadequate finance, lack of working premises, marketing problems, inadequate infrastructures, poor management practices, and technological, entrepreneurial and politico-legal problems while, the dependent variable is performance of small enterprises. Li et. al. (2005) uses three indicators to measure business performance, namely; efficiency, growth and profit. The factors must be closely monitored to ensure that stringent measures are taken within the best time to either take advantage of the opportunities or combat the threats found in the external environment. The finding of the study indicates that the major challenges that affect performance of small enterprises are working premises, access to finance, access to network, technology and ease of regulation. Based on the findings, the key recommendations made are to government bodies they should provide affordable source of finance and strengthening of government institutions at different level. To operators of small enterprises they should form groups and make negotiating power for borrowing purpose and give their employees training. To the further research could target the micro, medium and larger firms that have dominated the markets.