Factor Affecting the Growth and Continuity of Micro and Small Enterprise in Robe Town

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. MSEs 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. 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 Robe town. The study was employed through descriptive and explanatory research design in which stratified random sampling method was used to collect data from MSEs owners/ managers of five selected sectors according to the objective of the study with a total population of 949 and 281 samples. The samples were selected randomly from each stratum using proportionate allocation after stratification of the sectors. Questionnaires of data collection were used in the study. The data was analyzed using descriptive statistics and explanatory research design. The findings indicate that the most common factors constraining the growth of MSEs in Robe 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.

Keywords: growth, continuity, micro and small enterprise, Robe town

DOI: 10.7176/EJBM/12-16-03

Publication date:June 30th 2020