Challenges and Constraints of Small Scale Industries in the Oromia Regional State of Ethiopia

Abstract

The research is designed to identify the challenges and constraints obstructing small-scale industries’ (SSIs) performance. Questionnaires, interviews and focus group discussions were employed for data collection. Both descriptive and inferential data analyses were employed. Primarily, the study identified challenges as a combination of financial, marketing, working places, technology and internal management, and a combination of government and infrastructure challenges and constraints in descending order of severity. Together, they explained the predicted SSIs’ performance to the variance of 72.056%, whereas the remaining 27.944% of the variance was not explained by these identified sets of challenges in this particular study. Statistically, all the identified sets of challenges were significant at a 5% level. Of the identified challenges, the combined finance-related challenges were prioritised and contributed the highest influence (61.94%) variance, followed by the combined marketing-related challenges (54.61%), and other challenges and constraints were held constant. Combined working and selling outlets and technology-related challenges significantly influence (46.38%) and (33.64%) variance, respectively. Likewise, combined internal management-related challenges significantly freeze the growth of SSIs’ performance at (31.03%) variance. The combined government- and infrastructure-related challenges were found to be the least significant influencers (21.81%) in this particular study.