Factors That Affect the Growth of Micro and Small Scale Enterprises in DebreBerhan Town

Abstract

Micro and Small Enterprises (MSEs) in DebreBerhan town does not show necessary growth level and some of the enterprises ceased from market in their infant age. Hence, this study conducted with the objective of assessing factors affecting growth of micro and small enterprises in DebreBerhan town. The study has used both descriptive and explanatory research designed. Data for the analyses collected through questionnaire and focus group discussions. The study has used stratified random sampling technique to select 109 MSES from 1511 fond in DebreBerhan town. The study has used correlation and regressions to establish the relationship between variables. Correlation coefficients revealed a significant relationship between the factors and growths of MSEs (current capital). Variables such as initial capital, access of infrastructure, technology use, habit of receiving feedbacks from customer, profitability of business and government motivation are positively influence to growth of MSEs (profit). Hence improving those variables increase growth of MSEs (current capital). Multiple regression analysis has also revealed that 60.6% the variation in response variable (current capital) is explained by predictor variables and improving those variables increase growth of MSEs (capital). The study recommends that MSEs Office could be transparent at the time of allocating the working place to the MSEs, better to design close supervisor of MSEs and linking the MSEs with other private contractors working around DebreBerhan town, support the establishment and strength of business development services. Moreover, in order to reduce the influence of factors on growth of MSEs, policy makers and the service provider institutions need to consider and revise the extent, intensity, and quality of support and their linkages.