Abstract:
This study aims to identify the factors affecting the performance of micro and small enterprises in
Gambella town, Ethiopia. For the sake of achieving the objectives of this study, primary data was
collected from a sample of 218 operators selected with stratified random sampling methods
engaged in trade, service, construction, manufacturing, and urban agriculture sectors.
Performance reports and face-to-face interviews with officials were also data sources for the study.
The research employed both descriptive and inferential methods of analysis. Both quantitative and
qualitative approach was employed. The findings indicate that there exists a positive and
statistically significant relationship between financial factors, working place factors, management
skill factors, and infrastructure factors and the “performance” of MSEs. Moreover, the financial
factor, working place factor, management skill factor, and infrastructure factor significantly
explain the variations in the “performance” of MSEs at a 5% level of significance. Furthermore,
regulatory factors had a negative and statistically significant relationship with the “performance”
of MSEs. The results of this finding imply that the government should work with banks and other
lending institutions to provide sufficient funds to MSEs with minimum cost. Sufficient and
comfortable working premises are also required for MSEs to perform effectively. Government
bodies should coordinate and remove unnecessary official procedures, tax burdens, and
bureaucracy in licensing that consume the time of operation of the enterprises. Entrepreneurship
training on how to manage and control their business activities should be provided to take
advantage of new opportunities.
