FACTORS AFFECTING THE GROWTH OF SMALL AND MEDIUM ENTERPRISES IN BAHIR DAR CITY ADMINISTRATION

Abstract

This study attempted to identify factors that are affecting the growth of small and medium business enterprises with a special emphasizes on wood work, metal work, retailer, raw material supply, livestock raring, decoration, internet cafe and sub-contracting in Bahir Dar city administration by using a quantitative approach in a survey of managers, owners and managers, andother responsible members of the enterprise by taking closed ended questioners’. The study examined seven external and internal factors that influence the growth of SMEs. These factors are: access to finance, working places, government policy, marketing, infrastructure, internal management and entrepreneurship. Questionnaire was designed based on the factors affecting enterprises growth using proportional stratified sampling basis from the total population of 257 enterprises,by using Watson formula 160 samples were taken from Bahir Dar city administration SMEs; For data analysis, The researcher used descriptive statistics, such as percentage, mean, standard deviation, and inferential statistics such as Pearson correlation coefficients and multiple regressions using statistical package for social science (SPSS) version 20. The result of the study indicates that, access to finance, working places, government policy, market factor, entrepreneurship and infrastructure are important determinants and have positive significant relationship with the growth of SMEs, whereas internal management had insignificant impact on growth.