Determinants of Micro and Small Enterprises Growth in Selected Towns of West Shoa Zone, Oromia Regional State, Ethiopia (original) (raw)
Related papers
European Journal of Business and Management, 2014
The role of MSEs are not only income and employment generating but also breeding ground for entrepreneurs, has higher employment capacity and not capital intensive, and highly competitive, flexible and innovative. However, MSE growth is affected by a number of factors. Therefore, the main objective of this study was to investigate external factors affecting the growth of MSEs by using semi-structured questionnaire covering 160 randomly selected MSEs from five Kebeles of Shire Indasselassie Town. Binary logistic regression model was employed to test the hypotheses and to analyze the factors affecting the growth of MSEs. The result of the study revealed that access to credit from formal financial sources, access to infrastructure and access to working premise are significant factors for MSEs growth. MSEs having access to sufficient infrastructure and access to own working premise are growing rapidly than of those MSEs that are operating with limited access to infrastructure and operating at rented and family working premise. In addition, MSEs that have no access to credit are rapidly growing than those of MSEs having access to credit. Considering the well recognized importance of MSEs in job creation, income generation and poverty alleviation, all stakeholders (government and non governmental institutions) have the responsibilities to make intensive effort to remove the factors that stand on the growth of the MSE.
Determinants of Micro and Small Enterprises Growth: The Case of Addis Ababa Mse
This study was conducted in Durame Town, KembataTemaro zone, Southern Ethiopia. The objective of the study is to find out factors that determine growth of Micro and Small Enterprises and to assess current status of Micro and Small Enterprises in terms of employment and capital growth. Out of 148 Micro and Small Enterprises in the study area, 100 Micro and Small Enterprises (MSEs) were selected as a sample using stratified and simple random sampling technique. They were stratified based on the sector they are operating. The data were analyzed using descriptive statistical tools including mean, percentage and standard deviation. The binary logit model was applied to identify determinants of MSEs growth. The study used employment and capital as growth indicators. Growth rate for the two indicators was computed by the change of natural logarithm of employment or capita over the life of enterprise. After calculating growth rate, Micro and Small Enterprises were grouped into two categories growing and non growing. Micro and Small Enterprises which had growth rate < 0 categorized into non growing and Micro and Small Enterprises which had growth rate ≥ 0.The finding of the study shows that out of the total sample 40% of Micro and Small Enterprises are growing and 60% of Micro and Small Enterprises are non growing in terms of employment. In terms of capital 69% of Micro and Small Enterprises are growing and 31% are non growing. The model result indicated that out of 19 explanatory variables, 10 variables were found to be significant in determining Micro and Small Enterprises growth. Factors found to be significant for employment growth were: entrepreneurship training, location of enterprise, motivation of owner, market linkage, access to finance, access to water. Factors found to be significantly influencing capital growth were: education level of owner, motivation of owner, number of owners, initial employment size, social network. Hence, government and non-government organizations that are concerned with the promotion and development of MSEs need to take these factors in to account to accomplish better result and increase the potential contribution of MSEs to the economic growth.
The main objective of the study was to identify factors affecting the growth of MSEs in Robe Town. To achieve this objective, primary data were collected through a structured questionnaire from a sample of 384 micro and small-scale enterprise owners/managers. A multiple linear regression model was applied for data analysis. The results of multiple linear regression results reveal that growth of MSEs measured in terms of employment change was affected by owners/manager's education level, work experience of the managers/workers, size of business enterprises, access to formal credit, infrastructure and work premises. Based on the major findings of the study, expansion of credit services, provision of training, development of infrastructure and provision of workplace were recommended.
Growth Determinants of Micro and Small Enterprises: Evidence from Northern Ethiopia
This study aims to investigate the growth determinants of MSEs based on a survey covering 178 randomly selected MSEs from Mekelle city, Tigray regional state of Ethiopia through the test of four main hypotheses that are formulated concerning the role of gender of owner, initial investment on the firm, location and sector in which the firm operates as a main determinants of growth of an enterprise. Semi-structured questionnaire and interview were used to collect data, and the binary choice model which is logistic regression was used to identify factors that significantly affect the growth of MSEs using change in employment size since startup as a measure of firm growth in which about 76.4% of MSEs are found survival and the remaining 23.6% are growing. The binary choice logit model result shows that there is a significant gender difference on the growth of MSEs with male owner growing faster than those owned by female. In addition, the initial investment on the firm, the location and the sector in which the MSEs operates matter a lot for the growth of these enterprises. Hence, government and non government organizations that are concerned with unemployment reduction and poverty alleviation through the promotion and development of MSEs need to take these factors in to account to accomplish better result and increase the potential contribution of MSEs to the economic growth of the country.
Exploring Factors Affecting Growth of Micro and Small Enterprises: Evidence from Ethiopia
International Journal of Sustainable Development and Planning, 2022
Micro and small businesses (MSEs) create jobs at a low cost and assist society's progress toward wealth and growth. The aim of the study is to examine major factors that determine the growth of MSEs in the Siltie Zone, in southern Ethiopia. Out of the total 2,244 MSEs units, 488 respondents were sampled for the study using stratified and simple random sampling techniques. Descriptive statistical tools and a binary logit model are applied. Employment was employed as a growth indicator in the study. The findings of the study showed that out of the total sample, 49% of MSEs were growing and 51% of MSEs were not growing in terms of employment. The results showed that individuals and their relatives are the main source of finance for the majority of MSEs for two major reasons. The first and the most important reasons are due to the religion factor. A majority of the respondents replied that access to credit is forbidden to Muslim followers. The second reason is unwillingness to access credit; they fear the high interest rate of debt, the complexity of the procedure, and the lack of collateral. In addition to that access to infrastructure, access to finance and government policy are the major factor affecting MSEs engaged in construction sector. The major independent variables affecting growth of MSEs engaged in manufacturing sector are access to infrastructure, working premises, government policy and market linkage. Access to finance, market linkage and business management capacity are the determinant factor hindering the growth of MSEs operating trade sector. Access to infrastructure, market place and government policy were the determinant factor affecting the growth of MSEs operating service sector. Access to working premises, market linkage, government policy and owner motivation are affecting the growth of MSEs operating urban agriculture sector. Hence, government organizations concerned with the promotion and development of MSEs needs to work with the factors in each sector for economic growth. Keywords: micro enterprises, small enterprises, employment, growth factors
DETERMINANTS OF GROWTH IN MICRO AND SMALL ENTERPRISES (MSEs): A CASE OF JIMMA TOWN
International Journal of Research in Commerce, IT and Management, 2017
The government of Ethiopia has paid due attention for the promotion and development of micro and small enterprises as they are important vehicle to enhance employment, economic growth and equity in the country. The purpose of the study is to analyze the growth determinants of MSEs growth in Jimma town. In line with the objective, the role of initial investments on the firm, location and sector in which the firm operate, marketing access and business development service as main determinants of growth of an enterprise was analyzed. The binary model which is logistic regression was used to see the effects of identified determinant on growth of MSEs using change in employment size as proxy of growth. The binary choice result shows as location different has a significant effect on the growth of MSEs with accessible/town centre growing faster than those inaccessible/out of town. In addition, the initial investment on the firm and the sector in which the MSEs operates matter a lot for the growth of these enterprises. Hence, government and non-government organizations need to take these factors in to account to accomplish better result and increase the potential contribution of MSEs to the economic growth of the country.
This paper aims to investigate the dimensions and determinants of growth in Micro and Small Enterprises (MSEs) based on a survey covering 178 randomly selected MSEs in Mekelle city, northern Ethiopia through the test of four main hypotheses and arguments of Gibrat’s law and the learning theory hypothesis. Semi-structured questionnaire and interview were used to collect data, and the binary choice model was used to identify factors that significantly affect the growth of MSEs. Employment size index is used as a proxy to measure firm growth in which about 76.4 percent of MSEs are found survival and the remaining 23.6 percent are growing type. There is also an evidence supporting the law of proportional effect could hold in the MSEs context. Moreover, the logit model result reveals that there is a significant gender difference in growth of MSEs. Furthermore, the start up capital, location and sector in which MSEs operate matter a lot for their growth. Hence, government and non-government organizations that are concerned with the promotion and development of MSEs need to take these factors in to account to accomplish better result and increase the potential contribution of MSEs to the economic growth.
Shanlax International Journal of Management
This study aims to identify the determinants for the growth of Small and medium enterprises (SMEs) in Derash Woreda, Gidole Town. To achieve the “general and specific objectives”, this study was investigated external and internal factors affecting the growth of SMEs. This study was used a descriptive research design and a quantitative research approach. The primary data sources were collected from SMEs engaged in service, manufacturing, trade, construction, and urban agriculture. The sampling techniques used for this study are the stratified sampling technique. However, the sample size used for this study is 50 SMEs. For data analysis, multiple linear regression models were used. The finding for this study indicated that the external factors such as education, training, experience, and social network are positively or significant relationship with the growth of SMEs; on the other hand, the internal factors such as management capacity, marketing skill, accounting record-keeping, firm...
2023
This research aims to identify and analise Factors affecting the growth of micro, small and medium enterprise in the case of Kolfe Keraniyo Sub City Addis Ababa, Ethiopia. In this study, descriptive and explanatory research methods were used. The study was selected using stratified and simple random sampling, and purposive methods. Necessary data were gathered through questionnaire, interview focus group discussion and Observation techniques. Out of 2548 total population questionnaires were distributed to 346 samples. Key informant interviews were conducted with 10 management MSME governmental stakeholders at different levels. Moreover, FDG were held with 20 MSMEs sector committee members, Woredas and sub-city MSMEs experts and processes owner coordinators, and committee members of the graduated MSMEs. In addition to these, reviews of both published and unpublished materials were used in the study. Eventually, the study used a mix of qualitative and quantitative descriptive and explanatory methods with the help of SPSS version 20. The results revealed the dependent variables such as the marketing factors, financial factors, technological factors, Infrastructural factors Entrepreneurial Competence infrastructural factors, working place and managerial competence positively and significantly determine growth of Micro, Small and Medium Enterprises (MSMEs) of Kolfe keraniyo sub-city. Hence, the concerned government officials and other concerned parties can work in facilitating market linkages, strengthening Micro Financial Institution(MFI) services, cooperate towards encouraging and supporting Micro,Small and medium Enterprises (MSMEs) activity in the country. Key Words: Micro, Small and medium Enterprises, Growth, Determinant factors