A Thesis on Factors Affecting the Performance of Micro and Small Enterprises in kirkos Sub- city, Addis Ababa, Ethiopia

Abstract

The objective of the study is to assess the factors that are mostly affecting the performance of MSEs in Kirkos sub-city of Addis Ababa by using Descriptive research methodologies. The result of the study revealed that access to loan, access work premises, access to marketing and financial management practice particularly record keeping and maintain bank accounts are significant factors of MSEs growth. Mostly the sources of start-up capital of MSEs are from personal savings, Equb/Idir and family. On the other hand MSEs have no significant access to bank loan plus banks do not provide loan to MSE’s due to collateral obligations and other requirements. Evidentially 78% of MSEs have not received any credit service in the sub city. More over The MSEs are not getting the required land because of lack of awareness from the officials’ side and scarcity of the land in their sub city; as a result around 28% of those MSEs have received land for their operations. the study also, shows Lack of adequate marketing channels and marketing skills, Effective financial management practices are crucial problems to the growth of MSEs as a result the researcher unable to measure the financial performance of them. Based on this finding the researcher recommended that Government officials and other stakeholders should give priority to provide land for MSEs, Accesses loan facilities, follow up for bringing changes to the lives of many MSEs, and then MSEs themselves should be aware on preparing proper financial records and practices in order to know their status.