Determinants of micro and small enterprises success: The case of Debark Town , Amhara Region, Ethiopia.

Abstract

The study examined the determinant factors that affect the success of Micro and Small Enterprises in Debark Administrative Town. Considering this into account and so as to achieve the study objective, the study employed exploratory design. The study applied both quantitative and qualitative research methodology to identify which factors contributed most to the success of the sample of 152 Micro and small Enterprise in the town. The research employed stratified random sampling technique to select sample operators or respondents. Based on their growth level, enterprises were classified in to two; micro level and small level. Whereas, based on sectors enterprises were grouped in to two; industry sector and service sector. In addition, by using purposive/judgmental sampling techniques the study also selected participants to conduct semistructured interviews. These informants were TVED officers Data was collected by using structured questionnaire and semi-structured interviews from the selected respondents. Quantitative data analyzed by using statistical package for social science (SPSS-version 20) as well as qualitative data was analyzed through narration, description and discussion. The result of the study clearly found that, based on enterprises level of growth legal, financial and entrepreneurial determinant factors existed with higher extent among Micro enterprises than Small enterprises in the study area. Conversely, the study further discloses that, the level of technological determinant factors was found high among small enterprises. The result of regression analysis also shows that independent variables such as legal and political issues, working place factors, infrastructural factors, marketing factors, financial factors and entrepreneurial factors significantly affected the success of MSEs, together accounted for 51.6 % of variance in the study area. Furthermore, the finding of the study also indicated that, four of the seven determinant factors (such as working place, marketing, financial and entrepreneurial factors) were positive and significant predictors of MSEs success. Whereas legal and political issues, technological and infrastructural determinants were found to be insignificant predictors to MSEs success in the study area. Thus, from the result it can be concluded that, as the existence of working place, marketing, financial and entrepreneurial factors increase also the failure of MSEs success also increased significantly in the study area.