Abstract:
It is generally accepted that Micro and Small Enterprises (MSEs) have significant
contribution to job creating, generating income, and poverty alleviation. However, the
performance of MSEs in Godere Woreda is low. So, this study was done to investigate the
determinants of MSEs performance in Godere Woreda using descriptive statistics and
econometric model of multiple linear regressions. Both primary and secondary data were also
employed in getting the necessary information for the analysis of the study. A total of 260
sample respondents were identified using multiple stage sampling technique. The result of
the study shows that the majority of the MSEs have been a recent establishment and faced
challenges of inadequate startup capital, government policies and regulation related factors,
limited infrastructure facility, unfair competition, lack of training, limited access to credit,
and lack of know-how and skills to use technology. Furthermore, the study also noted that
most of the operators were found to be young labor force of male operators with educational
qualification of high school or less.
The result of linear regression analysis shows that out of twelve determinant variables, age of
the operator, age of the enterprise, access to credit, amount of initial capital, level of market
competition, government policies and regulation, access to training, gender of the operator,
use of modern technology, and access to market factors revealed statically significant to
affect performance of MSEs. Therefore, attention should be given by the policy makers and
other concerned bodies to develop supportive programs and corrective measures to ease the
constraints and difficulties facing performance of MSEs.
