Factors Affecting Performance of Micro and Small Scale Enterprises (Case of Karat Town, Konso)

Abstract

The aim of the study was to examine factors that affects the performance of micro and small scale enterprises with the special emphasis on manufacturing, construction, service, trade and urban agriculture sector in Karat town. The study sought to achieve the following objectives: examining effect of business information services, analyzing the effect of access to finance, determining the effect of access to infrastructure, examining the effect of managerial experience and lastly investigating the effect of working premises on performance of MSEs in karat town. The study was applied explanatory research design. In order to get the representativeness of each sector stratified random sampling technique was used to select sample of 185 MSEs. The study used close- ended questionnaires to collect the primary data from the sample respondents. Correlation and multiple regression analysis were used to analyze the data. The result of the study indicated that there is positive and significant relationship between the dependent and the independent variables, but the effect of access to infrastructure on MSEs’s performance was found positive and insignificant. 62.5 percent variations in performance were explained by the predictor variables.