EFFECTS OF BUSINESS DEVELOPMENT SERVICE ON THE PERFORMANCE OF MICRO AND SMALL MANUFACTURING ENTERPRISES IN ADDIS ABABA, THE CASE OF NEFAS SILK-LAFTO SUB-CITY

Abstract

The purpose of this study determined the effects of business development service on the performance of micro and small manufacturing enterprises in Addis Ababa, the case of Nefas Silk-Lafto sub-city manufacturing sector and to determine the relationship between Business development service and performance of MSEs. Particularly the study focuses to examine the effect of business development services on the performance of MSEs as general objective of the study. Accordingly, the study employed an explanatory research design and quantitative research approach. The target population of the study was 365 MSEs Members working in manufacturing sectors. It used systematic sampling techniques and the required data have been collected from a sample size of 318 respondent. Data were analyzed using measures of correlation and regression processed via SPSS version 25. The empirical study elicits five major independent variables which seem to influence performance of micro and small enterprise through standardized 5-point Likert-scale questionnaire. The study used both primary and secondary sources of data. The finding of the study discovered the agreement of respondents to the positively significant relationship between BDS and industry performance in the study area. Specifically, Market Access, Industry Extension service, working Area and infrastructure, Access to Finance and Working Capital Management. In addition, the study result shows that it has a positive significant effect on industry performance. From the predicting variables, market access, working area and infrastructure, and working capital Management were performed more effect on enterprise performance than the rest of variables in the study area. The study recommends that the government business development service offices should maintain different supportive more market access, trainings, good working area infrastructure, more access to finance and Increase working capital management of MSEs to increase their performance. In addition, the MSEs members should design good plans and programs with the external as well as internal environment to increase their performance.