Factors Affecting Success of Micro and Small Business Enterprises: In Case of Some Selected Woredas of Hadiya Zone, Snnpr, Ethiopia

Abstract

Micro and Small Enterprises play an important economic role in many countries and recognized as an important vehicles of economic diversification, employment creation, income generation and poverty alleviation .However performance of micro and small enterprises (MSEs) remains to be a major problem delaying MSEs from playing their productive role in the economy.Therefore, the motive of this study is intended to fill this gap byanalyzing success factors on performance of MSEs in Hadiya zone. This research was carried out through descriptive and explanatory research design.Furthermore the approach that was followed in this particular study was quantitative and qualitative.Purposive sampling technique was used to select sub sectors of MSEs (food and beverage, wood and metal, merchandise and retail shop, and textile and garment). Sample size of 161 from target population of 269 was determined by using stratified proportional random sampling method and simple random sampling technique was used to select respondents from each stratum. The descriptive (mean, percentage and standard deviation) and inferential (Pearson correlation coefficient and multiple linear regression) statistical tools were used to analyse collected data. The results of the regression analysis showed that management, marketing, technological, political-legal, planning and financial factors were statistically significant at 5% significance level and had positive relationship with the performance of MSEs.Based on the research results, it is recommended for MSEs have responsibility to adopt better technology that will enable them increase efficiency, improve quality and diversity of products. The government has also encourage and support MSEs on how to identify and adopt appropriate technology based on the need of specific types of products, service or consumer needs.

Keywords: MSEs, performance, success factors, political-legal

DOI: 10.7176/EJBM/12-34-01

Publication date: December 31^st 2020