Factors Constraining the Growth and Survival of Micro and Small Enterprises in Burayu
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Date
2011-06
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Addis Ababa University
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. MSE occupy a prominent position in the
development agenda of many developing countries like Ethiopia. Currently, in Ethiopia, the
Government has been promoting the development of MSEs through the formulation and
implementation of Micro and Small Enterprises Development Strategy and the number of MSEs in
the country is steadily growing. But, much more important than increase in their numbers, their
current status, stage and pace of development is significant because most MSEs are hibernated
from growing and faced with the threat of failure due to many factors. Little research exists that
examines these factors constraining the growth and survival of MSEs in developing countries,
especially in Ethiopia. The purpose of this study is to assess the constraining factors related to
marketing, management, finance and government supports hindering the growth of MSEs in
BurayuThe study was employed through descriptive design in which stratified random sampling method
was used to collect data from MSEs owners/ managers of eight selected sectors according to the
objective of the study with a total population of 1250 and 78 samples. The samples were selected
randomly from each stratum using proportionate allocation after stratification of the sectors.
Questionnaires and interviews tools of data collection were used in the study. The data was
analysed using descriptive statistics and presented through figures, tables and percentages. It is
generally recognized that MSEs face unique challenges, which affect their growth and
profitability and hence, diminish their ability to contribute effectively to sustainable development.
The findings indicate that the most common factors constraining the growth of MSEs in Burayu
are: lack of working premises, lack of working capital and access to credit, lack of market access,
inadequate availability of infrastructure, lack of managerial training and experience; and scanty
of marketing information. Replication of this study using larger samples and a broader
geographic base, longitudinal data collection and using more statistical tests is suggested for
cross-validation purposes in future researches to identify the factors constraining the growth and
survival of MSEs.
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Keywords
Survival of Micro and Small Enterprises in Burayu”