Effect of Internal and External Challenges on Micro and Small Enterprises’ Prospect

Abstract

The purpose of this study was to assess the effect of internal and external challenges on Micro and Small Enterprises’ prospect in Debretabor town. The research type employed to conduct this study was descriptive survey method in 200 owners of MSEs in Debretabor town. As to the tools that the researchers used were questioner, focused group discussion and unstructured interview. These were involved in 34questionnaires that contain 4 questions on owner’s information and 6 questions on external challenges, 20 questions on internal challenges and 4 questions about enterprises prospects. Regarding to the unstructured interview for Debretabor town MSEs Office and Debretabor Poly Technic College, 8 unstructured items were used. For focused group discussion 4 topics were administered.The result of the this study shows that prospects of SMEs can be negatively affected by Marketing problem followed by control and evaluation problem, environmental challenges and financial problems respectively in Debretabor town.Generally speaking, as the researcher has seen those back-ups from the study, there must be an immediate and strict measure should be taken by the local government and owners of MSE. Such as to solve the problem of finance, the government should develop specially loan system/strategy for SMEs with minimum collateral amount at fair interest rate. At the same time owners of MSEs should create a means of solving financial problems by forming informal financial sources association like “Equib” and through savings. MSEs should create an effort to compete with large companies by forming unions, and associations rather than competing independently and the local government also should encourage and improve the situation to MSEs owners to operate in different sectors to minimize the intensity of competition among themselves. And lastly owners should avoid unplanned withdrawal of cash for personal use and should apply principles of business entity concept.

Keywords: Challenge, prospect, micro and small enterprises

DOI: 10.7176/EJBM/11-1-06