Abstract:
The purpose of the study was to identify factors influencing the growth of micro- and small-sized
firms in Ambo town. The research design used was descriptive, with multi variables by using linear
regression, and the type of research employed was explanatory, which briefly explains the causal
relationship between the dependent and independent variables. For this research on factors that
affect the growth of MSEs in Ambo town, 196 respondents were chosen from a total population of
386 using a stratified sampling technique. The questionnaire was distributed to 196 sample groups;
however, only 170 respondents returned it, while the remaining 26 did not. This study included both
primary and secondary data sources in order to identify factors that influence the growth of MSEs
in Ambo Town. For this study, one dependent and eight independent variables were employed:
namely, financial-related factors, work-related factors, government-related factors,
entrepreneurial-related factors, internal management-related factors, infrastructure-related
factors, market-related factors, and indicators of MSE’s growth-related factors. The correlation
matrix and assumptions of regression were tested and validated by the use of SPSS 20-version
software, and the findings of these studies were categorized as internal and external to disclose the
predetermined specific objectives of the study. The result of the study was that internal
management-related factors, market-related factors, and work-related factors had a negative
impact, while entrepreneurial-related factors, financial factors, infrastructure-related factors,
government policy-related factors, and indicators of growth of MSEs had a positive effect on firm’s
growth. Finally, the researcher was forwarded a suggested solution based on the identified finding:
the government should provide technical training, entrepreneurial training, experience sharing,
advice, and consultancy to make SMEs competitive and profitable, and investigate factors based on
the right information
