Factors Affecting the Performance Of Of Micro and Small Business Enterprises in Addis Ababa

Abstract

This research aims to evaluated factors affecting the performance of MSEs with a special emphasizes on Food and Beverage; Textile and Garment, Wood and Metal, and Merchandise and Retail shop sectors in Arada and Gulele sub-cities, Addis Ababa. For the sake of achieving the objectives of this study, questionnaires were analyzed using statistical analysis such as descriptive and inferential analyses with the aid of Statistical Packages for Social Scientists (SPSS). The information gleaned through questionnaire from a sample of 727 operators and face to-face interviews were conducted with 73 operators of MSEs. The respondent operators were selected using random sampling technique. The empirical study elicited eight major challenges which seem to affect performance of MSEs in sub-cities which include: inadequate finance, lack of working premises, marketing problems, inadequate infrastructures, poor management practices, and technological, entrepreneurial and politico-legal problems including bureaucratic bottlenecks system. The findings further indicate that, there exists linear and positive significant ranging from substantial to strong relationship was found between independent variables and dependent variable. Moreover, the selected independent variables may significantly explain the variations in the dependent variable at 1% level of significance. Based on findings, recommendations to government bodies, to operators of MSEs and suggestions for other researchers are forwarded.