Frew Mengistu (PhD)Mastewal Moges2024-12-182024-12-182024-06https://etd.aau.edu.et/handle/123456789/3904Micro and small enterprises (MSEs) are considered a means to reduce poverty and generate employment. They contribute greatly to economic development in both developed and developing countries. For more than two decades, the Ethiopian government has prioritized this sector by providing infrastructure and inviting international development agencies and private sectors to participate in supporting MSEs. The Entrepreneurship Development Institute (EDI) is a UNDPsupported institute organized to provide Entrepreneurship Training Workshops and customized Business Development Services (BDS) for all potential clients. The major objective of this study is to examine the effect of business development services on the financial performance of micro and small enterprises, focusing on beneficiaries of the Entrepreneurship Development Institute. Four variables were employed as independent variables for this specific study: training and technical assistance, access to finance, access to market, and technology and innovation. Based on the major objective, specific objectives and a research hypothesis were developed. A crosssectional mixed approach was used to analyze the collected data. The research targeted active micro and small enterprises in Addis Ababa that received support from EDI since 2017. Based on a sample size calculation, data collection instruments were distributed to 216 owner-managers, and 190 (88%) responded. The researcher used structured questionnaires and personal interviews for data collection. The instrument's reliability was ensured using Cronbach's Alpha method. After the reliability test, the study employed a multiple regression model to understand how the independent variables affect the financial performance of MSEs. The dependent variable was the financial performance of MSEs, specifically measured by Return on Assets (RoA). The regression analysis results showed that all independent variables together significantly affected the financial performance of MSEs. However, only access to finance among the four independent variables was significantly and positively related to financial performance. The remaining predictors were not significantly related to financial performance. The study suggests that EDI should focus on BDSs, particularly supporting enterprises in accessing finance by collaborating with financial institutions like banks and microfinance institutions.enBusiness Development Service (BDS)Micro and Small Enterprises (MSEs) and Financial PerformanceThesis