Factors That Influence Sustainability of Micro and Small Enterprises: The Case of Some Selected Woredas of Ilu Aba Bor and Buno-Bedele Zones

Abstract

This study was conducted with the aim of examining the factors that influence sustainability of micro and small enterprises. This study was undertaken in Oromia National Regional State in Iluababor and Bunno-Bedelle Administrative zones and specifically seven woredas’ of those zones which was purposively selected. Thus to conduct this study in study area structured questionnaires were prepared and distributed to 298 sampled employees of the micro and small scale- enterprises and 275 were returned and used for analysis. Based on the literature discussed seven dimension of sustainability of micro and small enterprises; management skill constraints, financial constraints, market constraints, licensing and registration, workplace, technological, education level constraints were identified in the study. In this study both descriptive and explanatory research design were used. The respondents of the study were selected by using probability sampling techniques particularly stratified random sampling method. The data collected were analyzed using descriptive statistics such as mean and standard deviation and inferential analysis such as person correlation analysis and regression analysis was used. The result shows that the factors that influence sustainability of micro and small scale-enterprises were identified and they had statistically significant effects on the sustainability of enterprises and as well as there was a positive strong relationship between factors and the sustainability of micro and small enterprises. However, financial and education level factors has higher effect than the other variables. Market factors, licensing and registration and work place factors had moderate effect on the sustainability of micro and small enterprise. Besides, technological and management skill factors had lesser effect on the sustainability of MSE. The major implication of the study is that education level, financial and access of market related constraints were key problem of sustainability of the SMEs. The study concluded that micro and small enterprises of administrative zones would help seriously reduce and prevent these problems in order to assure the sustainability of the enterprises.

Keywords: management skill, financial, market, licensing and registration, workplace, technological, education level constraints and sustainability of MSEs

DOI: 10.7176/JESD/14-9-04

Publication date:May 31^st 2023