Please enter verification code
Factors Affecting the Performance of Micro and Small Scale Enterprises: Experience from North Shewa Zone, Ethiopia
Journal of Investment and Management
Volume 7, Issue 2, April 2018, Pages: 70-76
Received: May 6, 2018; Accepted: May 25, 2018; Published: Jun. 18, 2018
Views 1864      Downloads 880
Woldetsadik Kagnew Abebaw, Department of Management, DebreBerhan University, DebreBerhan, Ethiopia
Sisay Mulate, Department of Accounting and Finance, DebreBerhan University, DebreBerhan, Ethiopia
Lemma Nigussie, Department of Management, DebreBerhan University, DebreBerhan, Ethiopia
Article Tools
Follow on us
Research has shown that there are factors that contribute to success or failure in small enterprises in the government departments in the world. An environment conducive for the growth of MSEs is required, and this has necessitated an investigation into the factors affecting the performance of SMEs in North Shewa Zone, Ethiopia. The general objective of the study is to investigate factors that influencing the performance of micro and small enterprises in North Shewa Zone town, Ethiopia. The research used probability; strata sampling techniques. The researcher selected 386 respondents out of 11,244 populations. For data analysis, we have used OLS regression analysis Pearson correlation Coefficient. Based on the data collected from 386 MSEs in North Shewa Zone, Ethiopia, the results showed that there is a significant positive relationship between entrepreneurship, labour skill, infrastructure, finance, leadership skill and the performance of SMEs. This study recommends that the MSE businesses and government should effectively address the infrastructure especially in terms of electricity, work place, market place and roads in order to increase their performance.
MSEs, Performance, Finance, Leadership, Labor Skill, Ethiopia
To cite this article
Woldetsadik Kagnew Abebaw, Sisay Mulate, Lemma Nigussie, Factors Affecting the Performance of Micro and Small Scale Enterprises: Experience from North Shewa Zone, Ethiopia, Journal of Investment and Management. Vol. 7, No. 2, 2018, pp. 70-76. doi: 10.11648/j.jim.20180702.14
Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Sharmilee Sitharam and Muhammad Hoque (2016). Factors affecting the performance of small and medium enterprises in KwaZulu-Natal, South Africa. Problems and Perspectives in Management, 14 (2-2).
Bloch, H., & Bhattacharya, M. (2016). Promotion of innovation and job growth in small and medium‐sized enterprises in Australia: Evidence and policy issues. Australian Economic Review, 49 (2), 192–199.
Bokea, C., A. Dondo and J. Mutiso (2000). “Physical infrastructure”. In Andrew Mullei and A. Bokea (eds). Micro and small enterprises in Kenya: Agenda for Improving the Policy Environment. Nairobi: ICEG.
Du plessis, P. J., Jooste, C. J & Strydom, J. W. 2005. "Applied strategic marketing. Sandton": Heinemann Publishers (Pty) Ltd.
Eshetu Bekele & Zeleke Worku. (2008). "Factors that Affect the Long-term Survival of Micro, Small, and Medium Enterprises in Ethiopia." South African Journal of Economics, 10 (2):76-81.
Farmers’ Organizations in Kedah, World Review of Business Research, 3 (1), pp. 80-102.
Franz, L. 2000. “Making Small Business”- Engineering News. South Africa: 11-17 August.
Geoffrey Marozyk, David Dematto, David Festinger (2005), “Essential of research design and methodology”, John whiley and sons, inc, Canada.
Hailay Gebretinsae PhD (2007). "Entrepreneurship and Small Business Management", 2nd ed. Mekeleuniversity, Addis Ababa Ethiopia.
Harif, M. M., Hoe, C. H. & Ahmad, M. I. (2013). The Financial and Non-Financial Performance Indicators of Paddy.
John Adams and Robert Reasid (2010), “Research Methods for Graduate Business and Social Science Studies”, Asian pacific pie ltd.
Kothari, C. R. (2004). "Research Methodology: Methods and Techniques." University of Rajasthan.
Lo, M. C., Wang, Y. C., Wah, C. R. J., & Ramayah, T. (2016). The critical success factors for organizational performance of SMEs in Malaysia: A partial least squares approach. Revista Brasileira de Gestão de Negócios / Review of Business Management, 18 (61), 370.
Longenecker, J. G., Petty, C. W., Moore, J. W. and Palich, L. E. (2006). "Small Business Management, An entrepreneurial emphasis". London: Thomson South Western.
Marom, S., & Lussier, R. N. (2014). A business success versus failure prediction model for small businesses in Israel. Business and Economic Research, 4 (2), 63–81.
Matsotso, M. L. & Benedict, H. O. (2014). Non-Financial Performance Measures in Small Medium Enterprises.
Ngwangwama, M. M., Ungerer, M., & Morrison, J. (2013). An exploratory study of key success factors for business success of companies in the Namibian tertiary industry. International Journal of Innovations in Business, 2 (6), 604–629.
Nieman, G & Pretorius, M. 2004. "Managing Growth – A guide for entrepreneurs". Cape Town: Juta and Co Ltd.
Oketch, H. O. (2000). "Gender Equity. In A. Mullei and A. Bokea (Eds)." Micro and small Enterprises in Kenya: Agenda for improving the Policy Environment. Nairobi: ICEG.
Parker, S. (2004)."The Economics of Self-Employment and Entrepreneurship, Cambridge:" University Press, Cambridge. pp. 10-178.
Pearce A. J and Robinson R. B. (2007). "Strategic Management. London:" McGraw Hill.
Perrot B, E (2008). "Managing strategy in turbulent environments." Journal of General Management Vol. 33 No. 3 spring 2008.
Rami Alasadi and Ahmed Abdelrahim. (2007) "Critical Analysis and Modeling of Small Business Performance" (case Study: Syria). Journal of Asian Entrepreneurship and Sustainability, 3 (2):6-13.
Schmidpeter, R., & Weidinger, C. (2014). Linking business and society: An overview. In C. Weidinger (Ed.), Business success through sustainability (pp. 287–301). Berlin Heidelberg: Springer.
Anne Ngima Kinyua. (Jan. 2014). "Factors Affecting the Performance of Small and Medium Enterprises in the Jua Kali Sector In Nakuru Town, Kenya", IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 1. Ver. IV (Jan. 2014), PP 80-93.
SME Corp (2016). SME Annual Report 2016/2016. Retrieved 5 December 2016 from
Stevenson, H. H. (2000). "Why Entrepreneurship Has Won", February, USASBE National Conference, Coleman White Paper, pp. 34-416. Supply Chain Management, Journal of Economics, 5 (3), pp. 247-257.
Wanjiku Lily Njanja. (2009). "An Investigation into Management Strategies Affecting Performance of Micro, Small and Medium Enterprises (MSMES) In Kenya." University of South Africa.
Watson C. H. (2001). "Small Business versus Entrepreneurship Revisited." Entrepreneurship Education: A Global View. Brockhaus. Burlington pp 46-47.
Yamane, Taro. (1967). "Statistics: An Introductory Analysis, 2nd Ed., New York:" Harper and Row.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186