An assessment of factors affecting the development and promotion of micro and small enterprises

Magisterarbeit aus dem Jahr 2013 im Fachbereich BWL - Unternehmensführung, Management, Organisation, Wollega University (Academy of Administration and Economy Darmstadt), Sprache: Deutsch, Abstract: Despite the tremendous mushrooming in the number of micro and small enterprises, little research exists that examines the factors that affect the development and promotion of micro and small enterprises in Ethiopia particularly in Nekemte town. Micro and small enterprises are long recognized as important vehicles of economic diversification, employment creation, income generation and distribution, and poverty alleviation. As a result, micro and small enterprises occupy a prominent position in the development agenda of Ethiopia. The main objective of this study was to examine factors affecting the development and promotion of micro and small enterprises in Nekemte town. The total population of the study was 504 micro and small enterprises operating in the town. Five sectors (construction, manufacturing, urban agriculture, trade and service) were used as a stratum. Proportional stratified sampling technique was used for the selection of 96 micro and small enterprises from the strata. Following this, the researcher has selected key informants from each selected micro and small enterprises utilizing purposive sampling technique. Both quantitative and qualitative data were collected and analyzed. The researcher has utilized both primary (data collected) and secondary sources of information. The quantitative data was analyzed by using statistical package for social science (SPSS-version 16.0.) The result shows lack of access to credit from formal financial institution, lack of suitability and sufficiency of work premise, lack of technical and managerial capacity to guide operation, low level of educational achievement, lack of effective market linkage, lack of good market for their product, difficulty in forecasting market demand, failure to use business plan to guide operation, and low level of profit re-investment in business expansion were the major problems that hider the promotion and development of micro and small enterprises in the town. Moreover, the result also indicated that micro and small enterprises operators have concentrated in some sectors such as service and trade thereby creating unhealthy competition while agriculture and construction sectors which have potential economic activities seem to be ignored.