Assessment of factors affecting the growth of micro and small enterprises in oromia national regional state, Ethiopia

This study empirically investigated the factors affecting the growth of micro and small enterprises in Dodola town. The types of research that was used under this study were descriptive and explanatory with quantitative and qualitative of research technique. The research design was cross sectional survey. The study used multi-stage sampling.From 169 micro and small enterprises, 119 of them were randomly selected. Primary data, through questionnaires, key-informant interview and focus group discussion, were collected from the sampled 119 micro and small enterprises from Dodola town. Sample was selected based on the list available from micro and small enterprises promotion bureau of the Dodola district. Data were analyzed using both descriptive and inferential statistics with the help of Statistical Packages for Social Science. By using this software, analysis of variance was carried out to examine the variation in the growth of Micro and Small Enterprises related to the variation in each of the independent variables of the study. Pearson chi-square and t-test were 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 90.8 percent of MSEs are found survival and the remaining 9.2 percent are at growing stage. In accordance with this study results, the variation in sex of the owner/manager, the age of the owner/ manager, type of business, form of business ownership, having customer networking, sound business plan, having formal or informal business association, access to market information, and availability of market demand for their products constitute enterprise’s most important assets for attaining Micro and Small Enterprises growthif growth is measured using change in employment size. They are an important factor in the growth of MSEs in the study area. Hence, government and non government organizations that are concerned with policy makers, 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.