FACTORS DETERMINING THE FINANCIAL PERFORMANCE OF MICRO AND SMALL ENTERPRISEs IN ASELLA TOWN ADMINISTRATION

Abstract

This research aims to identify factors determining the financial performance of MSEs with a special attention to manufacturing, service, construction and trade sectors in Asella Town. Questionnaires are analyzed using statistical techniques such as descriptive and inferential analyses. The information gleaned through the questionnaire from a sample of 134 operators and face-to-face interviews were conducted with 12 operators of MSEs and 2 respondents from officers; i.e. process owner and another from expert working at the center of office of Asella Town Job Creation and Food Security. Furthermore the approach that was followed in this particular study was quantitative and qualitative. The technique applied was a standardized closed-ended questions and face-to-face interview. In addition, the data those were collected and analyzed using a statistical package for social sciences where tables were utilized for presentation of the results. The findings revealed that MSEs lacked financial support, technological, customer relationship and marketing skills in order for them to be competitive and well performed. The findings further revealed that the government was not doing enough in terms of the financial performance of SMEs in Asella town as most of the respondents were complaining about the stringency of the government support and regulations pertaining to MSEs. Hence the government bodies and other stake holders have to work in collaboration in order to solve problems of finance, working place, marketing and government support.