Browsing by Author "Hailu Yednekachew"

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    Factors Inhibiting the Growth of Micro and Small Enterprises in Ethiopia- The Case of Addis Ababa
    (Addis Ababa University, 2016-06) Hailu Yednekachew; Shibre Zewdie
    This study is an assessment of the factors that hinder the growth of micro and small scale enterprises in Addis Ababa. It is a survey research. The target population of the study were managers/owners and employees of the selected companies. A Sample size of 367 was taken out of 4380 MSEs. The relevant data was collected through survey questionnaire and random sampling technique was employed when distributing the survey questionnaires. Out of the 367 questionnaires distributed to the randomly selected employees and managers, 351 were properly completed and returned. This represents a response rate of approximately 95.6 % from the distributed questionnaires. The data was analyzed by using descriptive analysis technique through using tables, graphs and figures. Major findings revealed that internal factors such as poor management, failure to apply financial statement analysis, unplanned withdrawal of cash have low impact of the growth of theenterprises. However, external factors such as low market competitiveness due to lack of Adequate skill and appropriate equipment’s; which will not allow them to produce quality products and compete in the market, low financial provision (access to finance), limiting them from making additional investment; these are the major factors inhibiting the growth and performance of MSEs in Addis Ababa engaged in manufacturing sector. In line with the findings obtained from this study ecommendations to respective governmental bodies and MSE’s owners/managers have been forwarded. These among others include: MSEs owners/managers have to use effectively the borrowed amount for the intended purposes and able to save money on for future investment, practice ways of gathering customer information for the purpose of satisfying their needs through conducting market research and creating network with other MSEs, the government should arrange and give necessary materials through lease in which MSEs can cover the payment during the operations to reduce doubt of getting back payments for the borrowed finance, and financial institutions, the Federal and Regional Governments, donors, NGOs can assist in creating lines of credit and special windows for assisting growth-oriented businesses. Key words: Micro and Small scale Enterprises, Internal factors, External factors