EFFECTS OF GOVERNMENT SUPPORT ON PERFORMANCE OF MICRO AND SMALL ENTERPRISES, THE CASE OF AMBO TOWN

Abstract

The study was conducted to investigate the effects of government support on performance of Micro and Small Enterprises at Ambo town. The government is providing various development supports like financial access, training, technological support,working area, creating market linkage, promoting enterprises to increase, potential, profitability and performance of MSEs which have relevant contribution for development of the town. The purpose of study was to identify government supports and its applicability to solve problems/constraints faced MSEs in Ambo town. The study employed quantitative data analysis. Quantitativedata was analyzed using table, graph and logistic regression. The researcher used both primary and secondary sources to collect data. The primary sources of data are Micro and Small Enterprises in Ambo town (Manufacturing, Contraction, Trade, Service and Urban agricultural sectors). With regard to the sampling method, the study was designed to employ stratified sampling and convenience sampling methods. The data was analyzed using descriptive, inferential statisticsand binary logistic regression. In the descriptive statistics the researcher employed frequency distribution and percentage. The inferential side of the statistical analysis was used in an attempt to measure the effectsof different supports designed by the government to improve growth and performance of Micro and Small Enterprises. Performance of MSEs is measured by amount of capital, profit, sales volume and asset. Most of the independent variables such as access to finance, access to work area, market linkage, training, and promotion have positive relationship with dependent variable (Performance), and work experience has no relationship with dependent variable (performance).