FACTORS AFFECTING THE GROWTH OF MICRO AND SMALL ENTRPRISES IN GULLELE SUB CITY OF ADDIS ABABA CITY ADMINISTRATION

Abstract

This study aimed at identifying the major factors affecting the growth of MSEs in Gullele sub city, Addis Ababa city administration. The type of research design employed in this study was descriptive with mixed (qualitative and quantitative) research approaches. Primary data was obtained using questionnaires and interviews from a sample of 200 operators and face-to-face interviews were conducted with 20 selected operators and concerned government officials of MSEs. Secondary data was also collected from previous research works and official document. Stratified random sampling was used to divide the population into three sub population (strata) so as to produce a more homogeneous than the total population. Once the sampling frame was arranged by strata, the sample simple random sampling technique was used to select the final respondents from each stratum. The findings of this study proved that marketing, technological; management and financial factors are found the topmost four factors affecting the growth of MSEs in Gullele sub city of Addis Ababa city administration. In this study, growth (change in capital) was used as a dependent variable and the independent variables were politico-legal, working premises, technological, infrastructural, marketing, financial, management and entrepreneurial variables. The findings further indicated that there exists significant relationship between independent variables and dependent variable. Moreover, binary logistic regression results confirmed that entrepreneurship, financial and management factors have significant impacts on the growth of MSEs at 5% level of significance. SPSS version 20 and Microsoft excel 2007 were used to analyze the data. Based on findings of the study recommendations to government bodies, to operators of MSEs and suggestions for other researchers are forwarded.