ASSESSMENT OF FACTORS AFFECTING PERFORMANCE OF MICRO AND SMALL SCALE ENTERPRISES A CASE STUDY OF ASSOSA TOWN

Abstract

This study was conducted with the objective of assessing factors affecting performance of micro and small enterprises in Assosa town. The study identified that the external and internal factors affected performance of MSEs and their existence could improve the normal operation of micro and small enterprises performance. Correlation coefficients revealed a significant positive relationship between performances of MSEs. Variables such as political, legal, financial, marketing, working premises, infrastructural, opportunity seeking, persistence, commitment to the work, demand for efficiency and quality, goal setting, risk taking, information seeking, and self-confidence positively influence performance of MSEs (profit) and significantly affect performance of MSEs. Similarly, for capital, variables such as political, legal, financial, marketing, working premises, technological, opportunity seeking, persistence, commitment to the work, demand for efficiency and quality, risk taking, information seeking, and self-confidence positively influence performance of MSEs (capital) and significantly affect performance of MSEs. In addition, for number of employees; variables such as political, financial, marketing, working premises, opportunity seeking, persistence, commitment to the work, demand for efficiency and quality, information seeking, and goal setting positively influence performance of MSEs and significantly affect performance of MSEs in terms of number of employees. Improving those variables increase performance of MSEs (profit, capital and number of employees). The study recommended 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 Assosa town, support the establishment and strength of business development services. Similarly, the MSEs office could increase the capacity and skill of the operators through continuous trainings, and create linkage with entrepreneurship development center to fill entrepreneurial skill gaps of MSEs of owners/ mangers. Moreover, in order to reduce the influence of external and internal factors on performance of MSEs, policy makers and the service provider institutions need to consider and revise the extent, intensity, and quality of support and their linkages.