ASSESSMENT ON THE DETERMINANT FACTORS ON THE PERFORMANCE OF MICRO AND SMALL ENTERPRISES: THE CASE OF HOSSANA TOWN IN HADIYA ZONE

Abstract

This paper investigates assessment on the determinant factors on the performance of micro and small enterprises in Hossana town, in Hadiya zone south nation nationalities and peoples region. The study used survey method using a structured questionnaire which was administered to 125 sample respondents out of 182 micro and small scale enterprises owners/managers in Hossana town. In order to accomplish the objectives of the study, independent variables such as gender, age, education level of the owners or managers, management experience, planning practice, record keeping, access to finance, access of raw materials and the dependent variable, performance of micro and small enterprises was discussed. This study includes five micro and small scale enterprises such as construction, manufacturing, trade, service, and urban agriculture, from each strata owners or managers of the enterprise was taken for the study by using stratified and convenience sampling techniques. After the data collected, it was analyzed by using descriptive statistics like tables and graphs. Also multiple linear regression model was used to examine the variation in the performance of enterprises related to the variation in each of the independent variables of the study. The findings show that experience, planning practice, record keeping practice, access to finance and access to raw materials (inputs), are positively and significantly determine the performance of micro and small scale enterprises. This shows those micro and small scale enterprises that have better record keeping and planning practices perform better than those without a good recoding keeping and planning. From the sociodemographic variables, age and education level of the respondents are positively and significantly determine the performance of the micro and small scale enterprises. Based on findings, the following recommendations are forwarded: the micro and small enterprise managers should develop business plan; the concerned should provide finance for enterprises and better to give training on how to prepare plan, how to keep good record, and how to manage over all work activities in the enterprise.