Factors Affecting the Performance of Micro and Small Scale Enterprises: Experience from North Shewa Zone, Ethiopia

Abstract

Research has shown that there are factors that contribute to success or failure in small enterprises in the government departments in the world. An environment conducive for the growth of MSEs is required, and this has necessitated an investigation into the factors affecting the performance of SMEs in North Shewa Zone, Ethiopia. The general objective of the study is to investigate factors that influencing the performance of micro and small enterprises in North Shewa Zone town, Ethiopia. The research used probability; strata sampling techniques. The researcher selected 386 respondents out of 11,244 populations. For data analysis, we have used OLS regression analysis Pearson correlation Coefficient. Based on the data collected from 386 MSEs in North Shewa Zone, Ethiopia, the results showed that there is a significant positive relationship between entrepreneurship, labour skill, infrastructure, finance, leadership skill and the performance of SMEs. This study recommends that the MSE businesses and government should effectively address the infrastructure especially in terms of electricity, work place, market place and roads in order to increase their performance.