Abstract
The study focuses on “perception towards regulatory burden on small and medium enterprise performance” in Shashemene town, west Arsi zone, Oromia regional state, Ethiopia. The study adopted a qualitative research approach to address broad objective through answering research questions developed by a researchers. Specifically, this study used questionnaire to collect data from SMEs business owners, managers and employees and in-depth interview conducted. Data was analyzed by using descriptive statistics. The information obtained from a samples of the 140 small and medium enterprise and through face-to-face interview of 10 owners of SMEs business. The respondents were selected using stratified sampling techniques. The result of the study show that small and medium enterprise challenges from different factors as they perceived from the challenges of regulatory burden and identifies mechanisms used to mitigate problems from regulatory burden and how much the regulators have smooth contact with them and to what extent regulators made inspections. Moreover, the result indicated the perception of SMEs businesses towards regulatory burden. As a whole, the study suggests a series of measures should be taken by government policy, makers and regulators for SMEs performance. Researchers’ conclude and recommend that government bodies, Small and medium enterprise business owners, managers, employees and policy makers should focus on regulation to reduce regulatory burden on small and medium enterprises.
Highlights
The major development challenge is the promotion of economic growth and reduction of poverty
The small and medium size enterprise (SMEs) play an important role in the development of the national economy of any country .In Indonesia SMEs have been the main players in domestic economic activities as they account for more than 90% of all firms and 96.2% of total work force, especially women and youth .On average the GDP growth share of SMEs was above 2%, where as that of large enterprise was under 2% (Tambunan, 2011)
Among the given challenges business regulatory burden was ranked as the first and followed by access to finance it implies that regulatory burden is perceived as an obstacle for the business performance
Summary
The major development challenge is the promotion of economic growth and reduction of poverty. To alleviate poverty and bring economic development government of different countries under take different development strategies, such as creating an environment that encourages and support small and medium size enterprise (SMEs) sector initiatives and enabling them to operate with a system of good regulations, which is necessary in order to create and sustain an enabling environment for development, with respect to this area. SMEs by virtues of their size, capital investment and their capacity to generate greater employment and have demonstrated a powerful propellant effect for their rapid economic growth. Lara and Simeon, (2009; pp, 1453-1464) founded that SMEs generates substantial employment and economic out-put in many countries. Their share of overall employment tends to be higher in developing countries, which are typically more focused on small and medium enterprise. The small and medium enterprise sector seen as an important force to generate employments and more equitable income distribution, activate computation, exploit markets, and enhance productivity and technical change to stimulate economic development
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