Factors Affecting the Growth of Micro and Small Enterprises: In the Case of Sawena Woreda.

ABSTRACT

Micro and Small Enterprises (MSEs) play an important economic role in many countries and recognized as an important vehicles of economic diversification, employment creation, income generation and distribution, and poverty alleviation. The main purpose of the study was to investigate the factors affecting the growth of MSEs in sawena woreda.The study was employed descriptive and explanatory research design in which proportional stratified random sampling method was used to collect data from MSEs Owners/ managers of selected sectors according to the objective of the study with a total population of 518 and 221 samples. The sample was selected randomly from each stratum using proportionate allocation after stratification of the sectors. Both primary and secondary source of data were used. Questionnaires and interview tools of data collection have been used in the study. The data was analyzed using mean, standard deviation, frequency and multiple linear regressions with using a Statistical Package for Social Science Version 26 and presented through figures, tables and percentages. The result of the study indicates that access to finance; management factor; marketing factor and infrastructure are important determinants and have strong positive significant relationship with the growth of SMEs than other factors discussed in the thesis. It highlights the importance of enhancing access to credit by fostering collaboration among the government, private sector, and NGOs, and developing tailored lending schemes. Additionally, the study emphasizes the need for business management and entrepreneurial training programs to equip MSE owners with essential skills. It also strains the importance of improving infrastructure, including reliable power, water, and workspaces, to create a supportive environment for MSEs. Finally, the study recommends strengthening marketing efforts by facilitating linkages between MSEs and larger enterprises, as well as promoting MSE products through exhibitions and networking. These measures aim to address key challenges and support the long-term success of MSEs.7