FACTORS INFLUENCING THE PERFORMANCE OF MICRO AND SMALL ENTERPRISES (MSEs) IN ADDIS ABABA: THE CASE OF NIFAS SILK LAFTO SUB-CITY

Abstract

The objective of the study was to assess the major factors influencing the performance of MSEs in Nifas Silk Lafto sub-cities in Addis Ababa. The study was confined only Nifas Silk Lafto sub-cities which includes five different sectors such as manufacturing, construction, trade, service and urban agriculture. It was employed through descriptive research design and explanatory research design in which stratified random sampling method was used to collect data from MSEs owners (operators). Moreover, out of the total population of 696; only 248 samples were selected and distributed questionnaire, and interview were conducted from MSEs four owners (operators) and two managers of MSEs in the sub-cities. Moreover, the quantitative data was analyzed using statistical tools like descriptive statistics (mean, standard deviation, frequency and percentage) and inferential statistics (Pearson correlation, multiple linear regression by SPSS software version 20.0 & qualitative data be analyzed & Interpreted qualitatively. The findings of the study indicate that the major factors influencing the performance of MSEs in Nifas Silk Lafto sub-cities are: lack of finance, lack of working place, lack of infrastructure facilities, inaccessibility of market, technology and management problems. Finally, the study also attempted to forward possible recommendations such as the government and other stakeholders should expand financial institutions and accessibility of credit, construction of sheds and common facility centers at suitable locations, improving infrastructure facilities, enterprises should develop sufficient marketing skills and diversified their product as well as creating market opportunities, adapting production technologies that involve adequate knowledge and skill ; and the owners (operators) of MSEs should enhance their management knowledge and skills through proper training and experience sharing with other MSEs.