Review on Factors Affecting the Performance of Micro and Small Enterprise (MSE) in Ethiopia

Abstract

There is a great role of micro and small enterprises on improving the living standards of the entrepreneurial households enabling them increase basic needs such as food, education and health facilities, as well as production, investment and income.  However, despite their contribution, MSEs in Ethiopia, encounter many problems and as a result, many MSEs perform dismally and fail to contribute as per requirement. This paper is intended to review major constraints/factors affecting the performance of micro and small enterprises in Ethiopia. According to the reviewed literatures, the major problems hindering the performance of micro and small enterprises are financial problems, working space problems, marketing problems, bureaucracy, skill gap, infrastructure and input supply problem. Therefore, the government should focus on mechanisms of resolving these problems in order to increase MSEs performance and make them contribute to more to national economic growth.