THE IMPACT OF BUSINESS DEVELOPMENT SERVICE ON THE GROWTH POTENTIAL OF MICRO AND SMALL ENTERPRISES IN ADDIS ABABA, THE CASE OF NIFAS SILK LAFTO SUB CITY WOREDA 01

Abstract

Micro and small enterprises (MSEs) are believed to have a vital role in poverty reduction, employment generation as well as economic development in less developed countries like Ethiopia. However, the growth potential of MSEs has been challenged by lack of support in terms of business development services (BDS). Thus, this study examines the effects of Business Development Service (BDS) support on the growth potential of Micro and Small Enterprises (MSE) in Addis Ababa City Nifas Silk Lafto Sub City woreda 01. The data for the study were collected from 144 randomly sampled Medium and Small Enterprises (MSE) operating Nifas Silk Lafto Sub City woreda 01 and the data was collected via self administered questioners. To achieve objectives of the study, both descriptive and inferential statistical method of analysis was used to analyze the collected data. The Business Development Service (BDS) factors were included as predictor's variables. Statistical models that handle the complexities of the predictors' variables and continues response variable were employed. Econometrics model specifically multiple regression was used to investigate the impact of predictors variable on the response variable. The result of the regression model showed that BDS have a significant impact on the performance of MSE and it plays a significant role to boost the performance of MSE in terms of both its employment and sales volume growth. Specifically, BSD factors such as market linkage and received entrepreneur and technical training statistically significant and positively associated the employment and sales volume growth MSE. Hence, to promote of growth of MSEs in the as well as to attract domestic investors in MSEs sectors in the study place, the researcher recommend priority should be given to address the identified BDS factors is required.