FACTORS AFFECTING THE GROWTH OF MICRO AND SMALL

BUSINESS ENTERPRISES: IN THE CASE OF ADAMA CITY

A RESEARCH PROPOSAL SUBMITTED TO THE SCHOOL OF

BUSINESS AND ECONOMICS IN HARAMBEE UNIVERSITY IN THE
PARTIAL FULFILLMENT TO THE REQUIREMENTS FOR THE
AWARD OF MASTER OF DEGREE IN BUSINESS ADMINISTRATION

BY:
GENET ADMASU

ADVISOR
ABEBE SHAWUL (PHD)

HARAMBEE UNIVERSITY
SCHOOL OF BUSINESS AND ECONOMICS
POSTGRADUATES PROGRAM
DEPARTMENT OF BUSINESS ADMINISTRATION

MARCH 2023
ADAMA, ETHIOPIA
 TABLE OF CONTENTS

LIST OF TABLES ......................................................................................................................... iv

LIST OF FIGURES ....................................................................................................................... iv
CHAPTER ONE ......................................................................................................................... - 1 -
1. INTRODUCTION ............................................................................................................... - 1 -
1.1. Background of the study .................................................................................................. - 1 -
1.2. Statement of the problem ................................................................................................. - 3 -
1.3. Research Questions .......................................................................................................... - 5 -
1.4. Objectives of the study..................................................................................................... - 5 -
1.4.1. General objective of the study .................................................................................. - 5 -
1.4.2. Specific objectives of the study ................................................................................ - 5 -
1.5. Significance of the study.................................................................................................. - 5 -
1.6. Scope of the study ............................................................................................................ - 6 -
1.8. Organization of the study ................................................................................................. - 7 -
2.1. Theoretical Review .......................................................................................................... - 8 -
2.1.1. Definition of Micro and small business enterprises (MSBEs) ................................. - 8 -
2.1.2. The Improved Definition of MSBEs in Ethiopia...................................................... - 8 -
2.1.3. Factors affecting the performance of micro enterprises ........................................... - 9 -
2.1.4. MSBEs Growth Definition and Its Measurements ................................................. - 14 -
......................................................................................................... - 14 -
2.3. Conceptual framework ................................................................................................... - 17 -
CHAPTER THREE .................................................................................................................. - 18 -
3. RESEARCH DESIGN AND METHODOLOGY ............................................................. - 18 -
3.1. Research approach ......................................................................................................... - 18 -
3.2. Research design ............................................................................................................. - 18 -
3.3. Total and target population ............................................................................................ - 19 -
3.4. Sample Size determination ............................................................................................ - 20 -
3.5. Sampling techniques ...................................................................................................... - 21 -
3.6. Data Source and Collection techniques ......................................................................... - 21 -
3.6.1. Data Sources ........................................................................................................... - 21 -
3.6.2. Data Collection techniques ..................................................................................... - 22 -
3.7. Methods of Data Processing and Analysis..................................................................... - 22 -
3.7.1. Descriptive Analysis ............................................................................................... - 22 -

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 3.7.2. Correlation analysis ................................................................................................ - 22 -
3.7.3. Multiple regression analysis ................................................................................... - 23 -
3.8. Validity and Reliability of the Instrument ..................................................................... - 23 -
3.8.1. Validity ................................................................................................................... - 23 -
3.8.2. Reliability ............................................................................................................... - 23 -
3.9. Ethical Considerations ................................................................................................... - 24 -
.......................................................................................................................... - 25 -
APPENDIX ............................................................................................................................... - 28 -
Work Plan: Thesis Timetable and Budget Required................................................................. - 28 -

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 LIST OF TABLES

Table 1: The improved definition of MSBEs in Ethiopia ..................................................... - 9 -

Table 2: Total Population of MSBEs per sectors in Adama city ........................................ - 19 -
Table 3: Table Thesis Time Plan ........................................................................................ - 28 -
Table 4: Thesis Budget Plan ............................................................................................... - 28 -

LIST OF FIGURES

Figure 1: Conceptual Framework on Factors affecting the growth of SMEs ..................... - 17 -

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 CHAPTER ONE
1. INTRODUCTION
This chapter will covers and discuss about background of the study, statement of the problem,
research questions, objectives of the study, statement of the problem, significance of the
study, scope of the study, definition of the terms and finally, explain the organizational
structure of the study.
1.1. Background of the study
The micro and small business sector is recognized as an integral component of economic
development and a crucial element in the effort to lift countries out of poverty (Wolfenson,
2007). The dynamic role of micro and small business enterprises (MSBEs) in developing
countries as engines through which the growth objectives of developing countries can be
achieved has long been recognized. It is estimated that MSBEs employ 22% of the adult
population in developing countries (Fisseha, 2006).
In the face of its importance of SMEs in the economy, the survival, success and growth of
these enterprises in this sector is an issue of continuous concern. MSBEs are influenced by
many factors determine their fortune in the competitive business environment. Research that
can lead to the identification of those factors associated with small business growth therefore
were give a great deal of importance to policy makers, owner-managers and their advisors
(Alasadi and Abdelrahim, 2007).
In developing countries, MSBEs by virtue of their size, capital investment and their capacity
to generate greater employment, have demonstrated their powerful propellant effect for rapid
economic growth. The MSBEs sector has also been instrumental in bringing about economic
transition by providing goods and services, which are of adequate quality and are reasonably
priced, to a large number of people, and by effectively using the skills and talents of a large
number of people without requiring high-level training, large sums of capital or sophisticated
technology (ILO, 2008). Similarly, Lara and Simeon (2009) found that the MSBEs sector
generates substantial employment and economic output in many countries. Their share of
overall employment tends to be higher in developing countries, which are typically more
focused on small-scale production.
According to Gebreeyesus (2009), MSBEs are potential to enhance the economic growth,
micro and small business enterprises in developing countries have not given proper
consideration. They produce largely for the low income group and employ lower levels of

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techniques. Many of them are self-employed type with a low transformation rate into higher
size categories and their innovative activities are limited.
As per UNDP study conducted on 2015 SMEs are widely recognized to contribute towards
promotion and development of inventions, and thereby generate employment opportunities
for developing countries. MSBEs are particularly important in the context of the country‟s
poverty- reduction strategy because they are seedbed for the development of medium and
large enterprises, and because they absorb agriculturally under-employed labor, and diversify
the sources of income for farming families. In this respect, Ageba (2006) reported that, the
role of the MSBEs sector in employment creation, economic growth and poverty alleviation
has received the recognition it deserves as opposed to being viewed as marginal and
unproductive, tax evader, and with limited contribution to economic growth.
The Ethiopian Government issued the National Micro and small business enterprises Strategy
in 1997 and established the Federal Micro and small business enterprises Development
Agency in 1998 by recognizing the significance of this sector. The country‟s industrial policy
in 2003 and the poverty reduction strategy in 2006 have singled out MSBEs as major
instruments to create a productive and vibrant private sector and reduce poverty among urban
dwellers. These documents reiterated the importance of MSBEs, promotion through the
provision of finance, training, and infrastructure services among other things.
Although, Micro and small enterprise in Ethiopia are, however, confronted with several
factors that affects the growth of MSE. The major factors include financial problems, lack of
qualified employees, lack of proper financial records, marketing problems and lack of work
premises, etc. Besides, environmental factor affects the business which includes social,
economic, cultural, political, legal and technological factors. In addition there are also
personal attitudes or internal factors that affect the growth of MSE, which are related to the
person‟s individual attitude, training and technical know-how (Werotew, 2010). Usually,
there are many external and internal factors which are still affecting the growth of MSBEs.
Hence the purpose of this study is to assess the major factors that affected the growth of
MSBEs in the light of the MSBEs, development strategies of Ethiopia, within the context of
Adama city business environments. Ad also There are previous research works conducted on
MSBEs, most of them was focused from the success, profitability and growth point of view,
and conducted several years ago hence there was a time gap observed due to the un-recent of
information and the progressive policies and strategies in the promotion of MSBEs, the study
is hopefully filled the information gap created due to the longevity of study.

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1.2. Statement of the problem
In most developing countries, MSBEs face constraints both at start up phases and after their
establishment. In Africa, for example, the failure rate of MSBEs is 85% out of 100
enterprises due to lack of skills and access to capital and It is typical of MSBEs in Africa to
be lacking in business skills and collateral to meet the existing lending criteria of financial
institutions (World Bank, 2004). This, according to World Bank, has created finance gap in
most markets. The MSBEs are able to source and obtain finance mostly from informal
sectors like friends and relatives while medium or large enterprises obtain funds from banks.
This unequal access to finance by MSBEs and medium and large enterprises has undermined
the role of MSBEs in the economic development in African countries (World Bank, 2004).
MSBEs play dynamic role on the growth of country and were base of medium and large
firms. Since the studies focus on the MSBEs sector importance and microfinance institutions'
role in general. But the pervious study intensively based on the role on the growth of micro ,
small arid medium enterprise and the finance source in various financial institutions (Ageba
and Amha , 2006; Gebreeyesus , 2007; Nigussie, 2012;Eshetu and Mammo,2009 ; MoUDC
,2013) . Famously, Micro and small business enterprises are a basic issue, which are the
sources of job possibility for labour force and great proportion income creation for society.
Analyses of studies confirm that the aid of MSBEs in this view have long been
acknowledged all over the world (Liedholm, 200i; ILO, '2003a; Mazumdar, 2003).
The study conducted by Ethiopian CSA discloses that, the contribution of micro and small
business enterprises in creating job opportunities and in the development of our economy is
vital (FMSEDA, 2006). However, their contribution is very low in compared with that of
other countries due to financial problem, lack of qualified employees, lack of proper financial
records, marketing problems, lack of working premises and raw materials. Lack of
information about market opportunities and standards and regulations is one of the
underlying factors that hinder their growth (Mulu Gebreeyesus, 2009).
According to Zeleke Worku (2009) lack of integration between the vocational
curriculum taught at academic institutions and skills required at the workplace in small
businesses and enterprises is a major obstacle to the growth and development of MSBEs. The
same author continued stating: the growth of the MSBEs sector in Ethiopia is poor in
comparison with similar sectors in other … African countries such as South Africa, Kenya,
Uganda and Tanzania. Small businesses and enterprises in Ethiopia are generally
characterized by an acute shortage of finance, lack of technical skills, lack of training

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opportunities and raw materials, poor infrastructure and over-tax.
Devereux and Sharp (2006 cited in Zeleke Worku, 2009) identified that lack of access to
finance is the most influential factor from among all adverse factors hindering the growth and
development of the MSBEs sector in Ethiopia.
In Addis Ababa, MSBEs have a problem of finance when establishing the business most
individual sources of finance come from personal savings and loans acquired from relatives,
friends and moneylenders with high amount of interests (MoTI, 2005). After the business
goes operational, the probability of becoming profitable and paying back debts along with
accrued interest is less. Besides, MSBEs do not conduct market research and develop/design
a product or service as per the need of customers (Zeleke Worku, 2009). For MSBEs, lack of
premises is unquestionably a serious problem in the city. Most informal operators do not get
access to suitable locations where they can get easy access to markets (HLCLEP, 2006).
Further, the problem of technical procedures and appropriate technology used by the firm are
another factor associated with high technology of equipment‟s and use of new technologies.
Poor people have no access to get credit or money for self-employment and lack of access to
financial support are some of the major problems that prevail in the urban areas of the
developing countries. As a result they cannot take credit from financial sectors like
governmental and private banks. This forces them to borrow money from urban money
lenders at excessive interest rates. All the above problems are manifestations of poverty in
the developing countries including Ethiopia. Concerning these problems , various
approaches and many innovative institutional mechanisms have been developed across
the world in reducing poverty by providing credit and related services to enhance the access
of house hold to financial service to poor (Gelfeto&Dr B. V. Prasada,2013),.
In view of this, the Ethiopia government, in order to make available supply of monetary
services to different sectors, of the economy, particularly to micro and small businesses, has
been encouraging the establishment of formal microfinance institutions both in the rural and
urban area as an effective means of alleviate poverty and income disparity. Consequently, it
is tremendously essential that the microfinance institutions should provide access to credit for
the development of MSBEs, not only quickly but also at a lower interest rate.
As a matter of fact, relatively little was recognized about the assistance of MSBEs to the
economy. Consequently, insufficiency of information on uniqueness of MSBEs, population,
their varied feature of intervention and role in the economy appears to have slowed down
stakeholders from pulling property to make possible further expansions of the enterprises.
The accessibility of information would improve understanding of the state of the MSBEs

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sector and the hindrances which hold the enterprises back. Therefore this study will be
attempted to identify the different factors that influence the growth of MSBEs and also tried
to analyze which factors among the different will be significantly affected the growth of
MSBEs in Adama city.
1.3. Research Questions
Regarding, fill the above-mentioned research gaps this study will answer the following
research questions;
1. Are there available sources of funds for the start-up and the expansion of MSBEs in
Adama City?
2. What is the level of internal factors those affect the growth of MSBEs in Adama City?
3. What is the level of external factors those affect the growth of MSBEs in Adama City?
4. What is the recommend possible solution those alleviate growth problems of the MSBEs
in Adama City?
1.4. Objectives of the study
1.4.1. General objective of the study
In light of the above research problem, the general objective of the study will to examine
Factors Affecting the Growth of Micro and Small Business Enterprises in Adama City.
1.4.2. Specific objectives of the study
1. To find out the sources of funds available for the start-up and the expansion of MSBEs in
Adama City.
2. To examine the level of internal factors those affect the growth of MSBEs in Adama City.
3. To examine the level of external factors those affect the growth of MSBEs in Adama
City.
4. To recommend possible solution those alleviate growth problems of the MSBEs in
Adama City.
1.5. Significance of the study
The final finding of the study will add to the existing body of knowledge from different
important perspectives:
From researcher perspective: This research will be exposed the researcher to the practical
issues of the subject. It will be enabled her to match theory and in this way that the researcher
will better understand more the factors those affecting the growth MSBEs in theories.
Furthermore, the study will bring to light the different factors affecting micro and small

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business enterprises which will inform the design of appropriate measures aimed at bringing
with regard to the growth MSBEs in Adama.
From Micro and small business enterprises perspective: The findings of this study will
help MSBEs in Adama city within an insight into the benefits of using different factors
studied in this research to predict the factors that affect the growth of MSBEs.
From Academics/Researchers perspective: findings from this study will assist
academicians in broadening of the prospectus with respect to this study hence providing a
deeper understanding of the critical factors that affect the growth of MSBEs. The finding
will also increase the stock of theoretical and empirical knowledge especially in the practice
and also form the basis for further research
1.6. Scope of the study
This study will be focus on the title of “Factors Affecting the Growth of Micro and Small
Business Enterprises: In the case of Adama city”. The scope of this research will be
delimited to its scope only to those enterprises which are categorized as Micro and small
business enterprises conferring by the Ethiopian Ministry of Trade and Industry (MoTI)
definition. Even if there are so many factors that affect the growth of MSBEs this
research is delimited to firms Entrepreneur actor, Manufacturing Factor, Marketing
Factor and Administrative Factor. In addition, this study gives more information for
MSBEs that conduct around five types of business sector that are manufacturing, trade,
service, agriculture and construction.
1.7. Definition of basic terms
Enterprise: can be defined as an undertaking engaged in production and/or distribution of
goods & services for commercial benefits, beyond subsistence (household) consumption at
the household level.
Factors: A factor is a contributory aspect such as government regulation, business
information service, and management experience, marketing and financial management
influences that affect growth of micro and small business enterprises.
Micro Enterprise: when the numbers of its employees (including the owner or family)
are not greater than 5 & total asset is ≤ 100,000 ETB for industrial sector and ≤ 50,000
ETB for service sector (MSEDS, 2011).
Small Enterprise: means a business engaged in commercial activities whose capital is
not exceeding birr 1.5million and 6-30 employees for industries and 500000 for service
other than high technology and consultancy service institutions.

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Informal enterprise: there is consensus that they are small scale, and operate outside
registration, license and tax frameworks.
Formal enterprise: are defined as establishments principally engaged in production of
marketed goods and services but formally registered at respective government agencies to
undertake the business and hence have licenses to operate.
1.8. Organization of the study
The final paper of this study will be organized to five chapters:
The first chapter deals with background of the study, statement of the problem, objectives of
the study, significance of the study, limitations of the study, delimitations (scope) of the study
and organization of the study. Second chapter will be focused on relevant theoretical concepts
discussed. Here literatures are the sources of the concepts. The third chapter will be
emphasized about the research design and the methodologies used in the research. The tools
used to gather the data; the method of the data analysis and other procedural issues was
raises. The fourth chapter will be underlined the data collected, analyzed, and interpreted in
relation to the theoretical concepts. Following this, the findings of the research clearly
forwarded.
Finally, in the fifth chapter the researcher recommendations followed by the conclusions will
be presented.

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 CHAPTER TWO
2. REVIEW OF RELATED LITERATURE
This chapter covers and discuss about the related literature with theoretical review, empirical
review and the conceptual review related with main Factors Affecting the Growth of Micro
and Small Business Enterprises.
2.1. Theoretical Review
2.1.1. Definition of Micro and small business enterprises (MSBEs)
There is no single and universally acceptable definition of a small enterprise (Kayanula and
Quartey, 2000). This is so because the criteria and ways of categorizing enterprises as micro
and small differ from institution to institution and from country to country depending
essentially on the country‟s level of development. Even within the same country, definitions
also change overtime due to changes in price levels, advances in technology or other
considerations (Emma I. et al., 2009). Firms differ in their levels of capitalization, sales and
employment. Hence, definitions that employ measures of size (number of employees,
turnover, profitability, net worth, etc.) when applied to one sector could lead to all firms
being classified as small, while the same size definition when applied to a different sector
could lead to a different result.
2.1.2. The Improved Definition of MSBEs in Ethiopia
Micro and Small scale enterprises are categorized into industrial sector and service sector.
Under industry sector (manufacturing, construction and mining) micro enterprises are
defined as an enterprise that operates with 5 people including the owner and/or their total
asset is not exceeding Birr 100,000.Under service sector (retailer, transport, hotel and
Tourism, ICT and maintenance service micro enterprises are defined as an enterprise that
operates with 5 persons including the owner of the enterprise and/or the values of total asset
is not exceeding Birr 50,000.Under the industry sector (manufacturing, construction and
mining) small enterprises are defined as operates with 6-30 persons and/or with a paid up
capital of total asset Birr 100,000 and not exceeding Birr 1.5 million. Under the Service
sector (retailer, transport, hotel and Tourism and maintenance service) Small enterprises are
defined as operates with 6-30 persons or/and total asset, or a paid up capital is with Birr
50,001 and not exceeding Birr 500,000.When ambiguity is encountered between manpower
and total assets as explained above, total asset is taken as primary yardstick (MSEDS
strategy, 2011).

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Table 1: The improved definition of MSBEs in Ethiopia
Level of Sectors Human Power Total Asset
Micro Enterprise
enterprise Industry < 5 < Birr 100,000 ($ 5000)
Service < 5 <Birr 50000 ($ 2500)
Small Enterprise Industry 6-30 < Birr 1.5 mil($75000)
Service 6-30 <Birr500000($ 25000)
Source: Ethiopian Micro and Small Enterprise Development Strategy (2011)
2.1.3. Factors affecting the performance of micro enterprises
This section gives emphasis to two dimensions that influence micro and small enterprise
performance: the internal factors and external factors.
2.1.3.1. Internal Factors:
Small business success studies are largely biased towards the macro aspects of factors such
as structural, finances and enabling business environments than just dealing with
entrepreneurial performance (Johnson, 2008). However, the growth of a firm is, to a certain
extent, a matter of decisions made by individual operators. This is very much pronounced for
microenterprises that are run by owner-managers. Previous studies indicate that motivation,
individual competencies and personal background are important factors for the success of
micro and small business enterprises (Baum et al., 2001; Shane et al., 2003).
i. Entrepreneurial factor
Studies related to psychological factors of business success for developing country firms are
very scarce (Nichter and Goldmark, 2009). Most of the macro based studies have tended to
assume entrepreneurs with similar experiences and demographic characteristics. However,
none of these factors alone can create a new venture or drive success (Baum et al., 2001).
Accordingly, personality traits play a key role in driving ventures towards success.
The „big five‟ model advocated for by Johnson (2008) is widely used as a robust indicator of
personality traits. These big five factors that are generally agreed as personality traits or
characteristics include: extraversion, emotional stability, agreeableness, conscientiousness
and openness to experience. Based on the big five model, researchers have further classified
entrepreneurial personality traits in to five categories: need for achievement, locus of control,
motivation, risk-taking propensity, and self-efficacy. These traits are important psychological
factors that would influence the success of microenterprises (Johnson, 2008).
2.1.3.2. External Factors:
i. Marketing Factor
Lussier and Pfeifer (2001) emphasizes on the importance of marketing skill of the business

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owners as one factor to the success and better performance of small businesses. Marketing
skills, such as identifying new prospects, showing effective corporate positioning,
customer handling, finding ways to efficiently advertise, and the ability to come up with new
ideas are very important factors that micro and small business enterprises should
possess to be successful long term survival in the future.
Temtime and Pansiri (2004) also reported in their study of Small business Critical
Success/Failure Factors in Developing Economies, in Botswana shows that; marketing
activities such as product marketing, market research, and demand forecast and so forth have
a greater impact on the success of small businesses performance. In this study customer
relationship also reported as one of the important success factors of the small business
owners. From this study report one can understand the importance of marketing skills of the
business owners to be successful in their competitive environment.
Pulendran, Speed and Widing (2002), suggest that the quality of marketing planning is
associated with a higher level of market orientation. Perhaps one can argue that, better
quality planning assists managers seeking to implement a market orientation to achieve their
goal, or conversely, market orientation assists planning by providing a clear and
unambiguous goal that serves to focus the planning effort. This study also indicates that
managerial functions in small enterprises are limited to routine short term focused activities,
and very little emphasis is given long term competitiveness which intern has an impact on the
long-term success and profitability of the enterprises.
Small enterprise growth could be influenced by factors that affect its supply and demand
conditions because these factors have a direct implication on costs and benefits accruing to
the business. Accordingly, factors such as location and sector of the business could have a
direct influence on profitability, and performance of small entrepreneurs. Liedholm (2002) in
a study of small firm dynamics in Africa found that businesses located in commercial
districts and on roadsides were positive and statistically significant in influencing enterprise
growth rates compared to enterprises located at home, the base category in his regression.
ii. Working premise factor
For MSBEs, lack of premise is unquestionably a serious problem. Most informal operators
do not get access to suitable locations where they can get easy access to markets. The issue of
acquisition and transaction cost has become very prohibitive to the emergence of new
enterprises and to the growth and survival of existing ones. The issue of land provision and
the land lease system has greatly constrained the chances of micro, small and medium

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enterprises who aspire to startup businesses (Eshetu & Mammo, 2009).
According to Rolfe et al (2010) findings location is critical factor for sales and income of
small scale enterprises and hence entrepreneurs benefit from businesses in formal residential
areas. Logically, this finding stems from the higher per capita income and demand density in
developed urban areas. Demand density also makes taxi ranks and train stations more
lucrative. These spaces are limited and thus a source of competitive advantage that cannot be
copied or re-created. Mbonyane & Ladzani (2011) found that small businesses select a site
without first thoroughly analyzing the suitability of location. The same researcher found that
most of the micro-enterprises are failing owing to a lack of space provided by the
government and the various shortcomings of the small business owners regarding their
businesses. Olawale &Garwe (2010) also found that poor location has a negative impact of
the performance of micro and small business enterprises.
iii. Technology Factor
Choice of technology and innovative capacity is another important factor determining growth
of MSBEs. According to Albu (2001: 16) in Moyi, E and Njiraini, P (2005), it is divided in to
production, investment, and innovative/adaptive capability. Production capability is the static
knowledge and skill required to use existing Technology development which is far less
applicable to MSBEs is the process of designing new machineries/ equipment‟s/ Processes/
products.
The appropriate technology paradigm assumes MSBEs as beneficiaries and not as active
participant of development and improvements of technology; technology as a resource that
can only be adapted by MSBEs for improving factor productivity and reducing unit costs. It
also focuses on incremental choice and suitability of available technologies to the production
and market environment of MSBEs operating in environment of unskilled and large labor
market, low income consumer market, and low quality inputs. But appropriate technology
paradigm is challenged for its limited impact and its failure to narrow gaps between MSBEs
and larger enterprises. The technical capability paradigm has emerged as a result of
unsatisfactory result with appropriate technology paradigm and with an objective to raise
capacities of MSBEs in making use of innovated technologies as most innovated
technologies is adopted from separate workshops. It needs institutional, technical and
engineering skills to adapt these technologies to different climate, raw materials and market
demand.

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iv. Financial factors
Lack of adequate capital, sufficient loan, and inefficient financial market in terms of
facilitating financial resources to entrepreneurs are the major obstacles in doing business
particularly in the informal sector. Most micro and small business enterprises are highly risky
ventures involving excessive administrative costs and lack the experience in dealing with
financial institutions and do not have a track record of credit worthiness with banks. Since
most banking institutions are reluctant to provide small enterprises with loan and credits,
most MSBEs are unable to secure collateral requirements. As a result of absence in
financing, the creation of new enterprises and the growth and survival of existing ones
will be impeded (Commission on Legal Empowerment of the Poor, 2006).Access to finance
is a major bottleneck for the rapid growth and development of MSBEs mainly due to targeted
mechanism put in place to address the financial needs of small scale enterprises. Most micro
and small business enterprises do not have access to micro finance institutions and most
banks are reluctant to avail credit facility to small enterprises unless they have acceptable
collateral. The standard of loan appraisal, the long delay the banks take to sanction loans,
unfavorable disposition towards small loans and the limited collateral requirement, which is
over 100% of the loan amount, are the major obstacles that small scale enterprises are facing
(Commission on Legal Empowerment of the Poor, 2006).
Moreover, the interest rate by most micro finance institutes, which is higher than the lending
rate of formal banks, inhibits effectiveness in addressing the needs of micro enterprises
(Commission on Legal Empowerment of the Poor, 2006). According To Wolday and
Gebrehiwot (2006), more than 93% of MSBEs replied that they did not apply for bank loans
for the reasons they considered themselves as discouraged potential borrowers, need credit
but are discouraged from applying by the perceived or real high collateral requirement, high
cost of borrowing, difficulty of processes, ineligibility, or concern about their repayment
ability and uninformed (i.e. not aware of the facility, or where and how to apply, etc.).
The findings of Mulu (2007) also indicate that banks and MFIs do not seem to support
MSBEs expansion. Due to this 85% of the respondents have never received credit from these
formal sources. The availability of other informal sources of finance, however, affects
growth positively and significantly. This shows that in the absence of formal source of credit,
informal networks appear more appealing for MSBEs. Hence, firms with better network to
borrow from informal sources such as, relatives, friends, and suppliers better loosen credit
constraints, and grow faster. Lack of finance has been considered in many studies as a key
success factor for MSBEs such as Rolfe et al (2010), Mbonyane & Ladzani (2011).

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v. Infrastructural Factor
Good infrastructure facilitates have a positive effect in reducing the cost of operation.
MSBEs Owners in Ethiopia indicated that lack of efficient, reliable, safe and affordable
infrastructure is affecting the performance of their business. The physical infrastructure
facilities are not adequately developed and expanded in Ethiopia to meet the growing
demand of MSBEs activities. Most MSBEs have problems related to business premises such
as an increase in house rent, lack of basic services such as telephone lines, electricity supply,
sewerage and water services (Eshetu & Mammon, 2009). According to Commission on Legal
Empowerment of the Poor (2006), though not directly linked, inadequacy of infrastructure
(road, banking service, electricity, telecommunication and other services in facilitating
smooth operation of private investment are serious impediments. Rahel & Paul (2010) also
identify that even if access to infrastructure is not reported as a significant problem, lack of
access to water and lack of awareness about the advantages of telephones and media leads to
a negative or insignificant effect on the growth of enterprises. According to the findings of
the same research most MSBEs have an easy access to transportation. But, the number of
enterprises that has access to the rest of the infrastructures such as telephone, television, radio
and water are limited.
vi. Legal and Regulatory Framework
According to Lumpkin and Dess, (2004) the growth of SMBEs are affected by its business
climate. Clement et al., (2006) noted that an unfavorable business climate has negative
affect on small firm growth. Brown (2007) identified competition as one of the major
hindrances to the growth of small firm. Davidsson (2004) noted that an unfavorable tax
system, complicated rules and regulations can heavily hamper small firms‟ growth.
Krasniqi (2007) showed that corruption is a major source of the rise in unfair competition.
He further emphasized that the cost of complying with regulations and increased tax rates
increases small firms‟ expenses while limiting their growth. Likewise, St-Jean et al.
(2008) noted that unfair competition from the informal sector, cumbersome regulations,
and tax rates are the main obstacles on small business growth.
A study done by International Finance Corporation (IFC; 2013), based on responses of more
than 45,000 firms in developing countries, found that the top obstacles to their operations are
a poor investment climate, especially red tape, high tax rates, and competition from the
informal sector, and inadequate infrastructure, especially an insufficient or unreliable power
supply.

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2.1.4. MSBEs Growth Definition and Its Measurements
A current study investigated by Gupta et al, (2013) cooperatively revised aspects of growth
definition. Growth can be defined in provisions of income generation, value addition, and
expansion in terms of volume of the business. As well this, it can also be evaluated with
qualitative features like market share, product quality, and customer satisfaction.
Gupta eta! (2013), on his academic study of rising firms, he has done that business move
through five distinguishable stages of growth. All stage contains a comparatively quiet period
of expansion that ends with a management crisis (Masurel and Montfort 2006). These five
phases and cries of expansion are creativity, direction, delegation, coordination, and
collaboration.
Churchill and Lewis (2006) have developed five stage of an enterprise growth. There are
Existence, Survival, Success, Take-off and Resource maturity as depicted.

According to Meanwhile, to Brenna (2008) & United Nations,(2005) MSBEs is an institution

which make available service and resource proffer pecuniary products to unearned ,
indigent societies and these resources includes investment financial credit, indemnity ,
wellbeing concern and individual prosperity. Although as to Wanambisi (2013), the
empirical evidence shows that the relationships of MSBEs and MSBEs from his augment the
resource of MSBEs is one of prosperity instrument to small business sector more effectively
employed this resource in target area. Additionally, argue that the good achievement and
produce more assets by utilizing the credits of MSBEs those who workers of MSBEs and
impoverished citizens in the Bangladesh and Zimbabwe correspondingly.
According to Gebreyesus (2007), the practical results confirm micro and small business
enterprises has the largest work force covering sector which is follow by the overall citizens
engaged sector means agriculture sector contains majority of them in country. Consequently
to generalize this evidence MSBEs is one of the nucleus to economic increment those
indigent people participate in .cluster. Mead et al. (2008) suggested that both age of the
owner/ manager that the control variables have a negative link with enterprise growth
screening that young firms and MSBEs owned by young person's develop more than
its equivalents. But some investigators like Tiruneh (2011) gets there is no relation among
firm expansion and age of both the owner/manager.
According to JS Wiese (2014) who conducted a study on the determinant factors of
sustainability shows owners or managers with more experience (managerial, sector or

- 14 -
previous SME experience) tend to have a greater inclination towards growth and was also
considered essential criteria for sustainability. Woldie, et al., (2008) and Mbugua, et al.,
(2014) contend that SMEs owners or managers with more experience (managerial, sector or
previous small businesses experience) tend to have more growth potential than those with a
lack of expected potential and also the higher the level of education attained by the
owner/manager, the higher the likelihood of growth of the enterprise. Managerial skills and
experience affect businesses performance at certain level.
As per Simeon and Lara (2005) MSBEs appear to be disproportionately afflicted by the
underdeveloped nature of financial institutions in developing countries. For various reasons
ranging from a lack of collateral to bias against small firms, MSBEs tend to face greater
financial constraints than do larger firms. The study done in Kenya related to financial
management of MSBEs identified the heavy investment in inventory ties up capital which in
the end reduces firm‟ profitability therefore, there is need for a tradeoff between receivables
and holding inventory if the firm is to attain the required profits (Charles et al., 2014).
Marketing activities such as product/service marketing, marketing research and information
and promotion impact negatively on the performance of SMEs due to lack of marketing skills
by SMEs owners.
The study conducted in Nigeria by Ebitu et al., (2015) identified most of problems
encountered MSBEs are marketing related some of which include inability to apply modern
marketing techniques and strategies, difficulty in managing the firm‟s advertising and other
promotional tools, competition from large firms, lack of adequate research, poor and
mundane production technology, lack of adequate financing of marketing activities, poor
quality products and problems of standardization, warehousing, inventory control, and poor
transportation facilities, branding/packaging, financing and credit facilities, and risk bearing
among others. These problems are capable of impeding, disrupting and hindering the
growth, development and expansion of the firms in its effort to satisfy its target market and
also create value for the organizations.
According to Noghor (2015), MSBEs are facing challenges brought about by changes in
technological environment; hence they are failing to keep abreast of these changes. Large
businesses, because they have the advantage of being technologically advanced, end up
poaching the MSE market niche and resulting in MSBEs being kicked out of the game.
Failure not to employ the latest technology means producing at higher cost than do
competitors in the market thus, eventually exiting the market due to tough competition.
Though MSBEs are considered an important source of job creation and economic growth,

- 15 -
their survival is a difficult task for managers for they have typical characteristics that end up
becoming barriers to their development. According to Olawale, (2014) reason for failure are
lack of management experience, lack of functional skills, poor staff training and
development, poor attitudes towards customers, unavailability of a logistics chain and a high
cost of distribution, competition, rising costs of doing business, lack of finance and crime.
The reason for failure of MSE identified by Mariana, (2014) lack of customer, previous
experience in the field of business, lack of knowledge or managerial experience, lack of
government policies to support small business, the lack of bank credit.
According to this study, the main internal factors identified were management factors which
include poor selection of associates in business, lack of strategic business planning, and
costly and inaccessible training facilities. The major entrepreneurial factors include lack of
persistence and courage to take responsibility for one‟s failure and absence of initiative to
assess one‟s strengths and weakness. He further noted that the contextual factors such as
financial, workings premises, marketing and infrastructure had very high effects on the
performance of MSBEs compared to other factors in the research area and is prevalent to the
businesses. In a survey conducted on MSBEs in selected cities in Ethiopia by MUDC (2013),
they identified a number of factors including inadequate coverage of the support services,
low level of education among the operators, limited relevance of the trainings and exclusion
of the most of the private MSE operators from the support services provided by the
government. The other study which has similar finding indicates Drbibe et al., (2013) lack of
access to finance, lack of knowledge and skills, lack of working premises, lack of access to
market, lack of necessary support from relevant institutions, shortage of raw materials, and
regulatory problems as major challenges. The major constraints identified by various studies
on MSBEs in Ethiopia are associated with market and finance problems. According to
Gebreyohannes (2015) Market is the major constraint that highly hinders the firms‟
performance for all sectors in the manufacturing MSBEs.
As indicated in survey of Assefa et al., (2014) the MSBEs were inquired to identify the major
business constraints hampering their business. Access to finance tops the constraint list
where 37.7% of the MSBEs reported it as a key constraint. The financial constraints facing
MSBEs is one of the critical bottlenecks for the growth of MSE. Some of the more common
problems facing MSBEs include failing to get the loan they applied for and when they do, it
is after a very long loan procedure. Repeated delays in loan delivery affect their business.
The upper loan limit set by the MFIs falls short of the loan requisite of MSE. Especially
matured MSBEs usually find it very hard to meet their loan requirements from MFIs. The

- 16 -
MSBEs feel that the interest rate and service charges are very high given the legal business
environment MSBEs operate with. As clearly stated in Terfasa et al., (2016) access to finance
appears to be a very severe or major obstacle as reported by about 55% and 64% of micro
and small scale enterprises respectively. The problem of access to finance is more severe for
small enterprises compared with micro enterprise as the latter often have access to
microfinance institutions (MFIs) as their loan requirement is within the capacity of MFIs.
2.3. Conceptual framework
The conceptual framework of the study will be based on the model presented in a previous
study by (Ajmal & Rehman, However, there are many models of SMEs growth that have
significantly impacted into organizations performance. The influence of these factors to
the firm performance is very important but it is noteworthy that the management has no
(little) control over them (Wanjiku, 2009).
Based on the theoretical and empirical literature reviewed, the researcher developed the
following conceptual framework to show relationships between dependent and independent
variables. The growth of MSE is influenced by both the internal and external factors and the
operators need to understand the impact of these factors on MSE growth.
Figure 1: Conceptual Framework on Factors affecting the growth of SMEs

External Factors of
Independent Variables

Dependent variable
Financial Factor

Marketing Factor

Infrastructural
Factor Growth of
MSE
Working Premises
Factor

Legal Framework Entrepreneur

Factor Factors

Technological
Factor Internal Factors of
Independent Variables
Source: Researcher Own Mode

- 17 -
 CHAPTER THREE
3. RESEARCH DESIGN AND METHODOLOGY
This section addresses the overall methodology will be used in this research. It consists of
brief discussion of the study area, research design, target population, techniques and methods
of sampling, data collection, data processing and analysis methods, Research Design Quality
and Ethical Considerations the area in which the study is carried out.
3.1. Research approach
There are two main domain research approaches; qualitative and quantitative research
approaches. Qualitative research approach is used when the method of data collection and
analysis used are non-quantitative. Whereas, quantitative research is where quantitative
measures are used to analyse and interpret data. These approaches divided into two different
types: qualitative and quantitative. The first one relies on terms and observations to convey
fact and attempts in natural settings to characterize individuals. The quantitative approach on
the other hand stems from a strong academic tradition, which places considerable trust in
numbers representing opinions or concepts (Amaratunga, Baldry, Sarshar, & Newton, 2002).
A third method, called Mixed Method Analysis, uses both methods sequentially or at the
same time to create a research outcome that is better than either method individually (Malina,
Nørreklit, & Selto, 2010).
Therefore, this study will be employed by using mixed approach. The term "mixed methods"
refers to an emerging research methodology that advances the systematic integration, or
"mixing," of quantitative and qualitative data within a single research or on-going inquiry
research program (Gunasekare, 2013).
3.2. Research design
Research Design is the set of methods and procedures used in collecting and analyzing
measures of the variables specified in the problem research. The design is divided into three
broad categories as per their purpose; Exploratory, descriptive, and explanatory (Mark,
Philip, & Adrian, 2016).
Despite the researcher intentions to clearly the examine factors affecting the MSBEs in
Adama City. Hence, the researcher will be employed both descriptive and explanatory type of
research; in order to enable to describe the state of affairs as it exist at the time of study
period, and also to explain the relationship between variables that correlated to estimate the
integrated influence of the factors on MSBEs growth.

- 18 -
Descriptive studies presenting data in a meaningful form thus help to understand the
characteristics of a group in a given situation, to think systemically about aspects in a given
situation, to offer ideas for further testing and research, and/or to help make decisions for
organizations (Sekaran, 2003), Thus, the major reason why the researcher will employ a
descriptive approaches is that the researcher is interested in describing the existing situation
assess the Factors Affecting the Growth of MSBEs in Adama City.
Exploratory research is to define the limits of the environment in which the problems,
opportunities or circumstances of interest are likely to exist and to identify the key factors or
variables that may be identified there and are relevant to the research (Yousaf, 2017).
However, this study will also use explanatory study design, to explaining, understanding,
predicting and controlling the relationship between variables.
3.3. Total and target population
According to Zikmund (2010), a population is any complete group that shares some set of
characteristic. Target population is the intended group for the study. Research population also
refers to units of individuals that are the focus of a research, in some cases belonging to the
same geographical area and containing similar characteristics (Kumar, 2011). The target
population is the category of people in which the intervention aims to perform research and
draw conclusions (Banerjee & Chaudhury, 2010).
Despite the purpose of the study is to examine the Factors Affecting the MSBEs and in order
to get relevant information related to the study the researcher will be focused on list of the
population formally registered MSBE until July 2014 Ec by Adama city Administration
Micro and small business enterprises (MSBEs) office will be obtained. The total population
of the study is five hundred seventy four (574) Micro and small business enterprises under
seven sectors which includes: Mineral & Energy & Industry (62), Agriculture & Trade (138),
and Service, Manufacturing & Construction (274) in Adama city.
Table 2: Total Population of MSBEs per sectors in Adama city
MSBEs sectors No. of MSBEs Per sectors in
Study Area in Adama city Adama city
Service, Manufacturing and 274
Adama city, Construction
MSBEs office Agriculture and Trade 138
Mineral & Energy and Industry 62

Total Population of MSBEs in Adama city 574

Source: Adama city, Micro and small business enterprises (MSBEs) office (2014/15)

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3.4. Sample Size determination
According to Catherine Dawson (2009), the correct sample size in a study is
dependent on the nature of the population and the purpose of the study. Although there are no
general rules, the sample size usually depends on the population to be sampled. In this study
to select sample size, a population Adama city

currently existed in Adama city. Since it

is difficult in line with time and cost constraints to collect the necessary data from the whole
population that engaged in the MSBEs business program, the sample individual will be
selected by using simple random sampling method. The researcher will be used sixty (60)
respondents as a sample size, which are a full representative of the total households
participating on the program and obtained based on the following formula, which is
developed by Kothari in 2004. To determine n or sample size, the researcher uses the
following formula. Reasons for the researcher will be used this form of sampling almost the
numbers of participated people are high.
Despite the purpose of the study is to examine the Factors Affecting the MSBEs and in order
of that comprised list of the population formally
registered as MSBEs until July 2014 Ec by Adama city Administration Micro and small
business enterprises (MSBEs) office obtained with 10% level of significance and the sample
size selected here will be considered as representative of: Mineral & Energy & Industry (62),
Agriculture & Trade (138), and Service, Manufacturing & Construction (274) in Adama city
respectively. To estimate the sample representatives the following formula was applied. Since
it is relevant to studies where a probability sampling method is used (Watson, 2001).

Where, Confidence level = 90% = 0.9

e =Error = 10% = 0.1
Z=1.64
p= probability of success = 0.5
q= probability of failure = 0.5
n= sample sizes
N= total population=228

- 20 -
 (1.64) 2 (0.5) (0.5) (574)
n 
(0.1) 2 (574  1  (1.64) 2 (0.5)(0.5)

n = 385.95
6.40
n = 60.30 approx. sixty (60) respondents
Therefore, the researcher will collect the data from selected sample 60 respondents through
interview and questionnaire.
3.5. Sampling techniques
Sampling techniques provide a range of methods that enable one to reduce the amount of data
needed for a study by considering only data from a sub-group rather than all possible
elements. There exist two types of sampling: probability where the chances of each case
being selected from the population is known and is usually equal for all cases, and non-
probability sampling, where the chances of each case selected from the total population is not
known, making it impossible to answer research questions (Saunders & et al., 2009).
To select samples of enterprises from the total population of MSBE a stratified random
sampling will apply to get a representative number of enterprises from each sector that will
be considered in this study. This technique will prefer because it will uses to assist in
minimizing bias when dealing with the population. With this technique, the sampling frame
will organize into relatively homogeneous groups (strata), before selecting elements for the
sample. The strata‟s are sectors of MSBE those are Mineral & Energy & Industry,
Agriculture & Trade, and Service, Manufacturing & Construction sectors at Adama city. To
select samples of MSE operators from each strata (sectors) simple random sampling
technique was applied from a complete list of enterprise operators in the town. To select
samples of MSBE operators from each strata (sectors) simple random sampling technique
will be applied from a complete list of enterprise operators in the town.
3.6. Data Source and Collection techniques
3.6.1. Data Sources
The researcher will be used primary and secondary sources of data in gathering and analysis
the research. Primary data is firsthand or raw data, original records and materials created by
participants or witnesses of the events under study. In collecting primary data for the study,
the researcher will uses both personal interview and questionnaire. Secondary data is
information that were gathered and often interpreted by other researchers and

- 21 -
recorded in books, articles, and other publications. In collecting secondary data will uses
the existing but related records like newsletters, annual reports, books, publications etc.
3.6.2. Data Collection techniques
In this study, questionnaires will uses as the primary research technique. The questionnaires
includes both open and close ended type of questions and most of them are close ended type
of questions(pre-coded) that make it simple for the respondents and also for easy analysis.
The nature of the study will explain to respondents and respondents‟ confidentiality of
information provides is also assured. Respondents provide with detail instructions as how to
the completion and return of questionnaires. The design questionnaires properly distribute to
all the selected respondents respectively. Formal interview will also conduct with most
important selective trainees, relevant officers and the head of each management team.
3.7. Methods of Data Processing and Analysis
The he data analysis will be done after all the relevant data will be gathered from the
respondents. Quantitative data will be collect, enter and code into a computer and analyzed
using SPSS Version 24.0 statistical software. Errors related to inconsistency of data will
check and correct during data cleaning. The empirical analysis of the study will conduct
using both descriptive statistics and econometric regression model. Discussion based on
descriptive statistics will made by using measures like percentages, tables and graphs will use
for identifying factors of growth of MSBEs with in various explanatory variables.
3.7.1. Descriptive Analysis
Descriptive analysis‟s the simple conversion of data in a way that defines the basic physical
characteristics such as central tendency, distribution, and variability. Descriptive statistics
widely used means, medians, modes, variance, range, and standard deviation to convert raw
data into a form that is easy to understand and interpret (Zikmund et.al; Brooks, 2014). So,
descriptive statistics will be employed to quantitatively describe the important features of the
variables using mean, maximum, minimum and standard deviations.
3.7.2. Correlation analysis
The Correlations analysis is a series used when the researcher wants to explore the extent to
which two or more variables co-vary, that is, where changes in one variable are reflected in
changes in the other (Creswell, 2008). Moreover, it is a statistical measure of relationship
between two variables. Correlation coefficient is useful for the reason that it can compare two
associations without regard for the amount of variance revealed by each variable distinctly
(Zikmund et.al; and Brooks, 2014). Hence, Correlation analysis was used to identify the

- 22 -
relationship between the dependent and independent variables. Moreover, in this study to
ascertain whether a statistically significant relationship that exists between financial,
marketing, working premises, infrastructural, technological, legal framework and
entrepreneur factors with growth of MSBE, the product moment correlation coefficient will
use.
3.7.3. Multiple regression analysis
Regression analysis is concerned with the study of how one or more variables affect changes
in another variable (Kothari, 2004). It is about describing and assessing the association
between a dependent and one or more other independent variables (Brooks, 2014). Hence,
multiple regression data analysis method will employ to analyze the relationship between the
growth of MSBE and the independent variables.
3.8. Validity and Reliability of the Instrument
3.8.1. Validity
Validity is the degree to know the measuring instrument or materials actually measure the
problem or not. It refers to the issue of whether the data collected instrument has a true
representation of what is being studied or researched. To ensure content validity, the
researcher used questionnaires adopting a standardized questionnaire in the study Kothari
(2004). Validity is the degree to which results obtained from the analysis of the data actually
represent the phenomenon under study and therefore ensuring validity of the data collection
instrument involved going through the questionnaire in relation to the set objectives and
making sure that it contains all the information that can enable answer these objectives
(Najanja, and Naiagi, 2013).
Thus, to ascertain the validity of the instrument, content validity will be adopted and the
validity of the questionnaire assessed and found out to be strong after piloting it with people
to respond to the questionnaires as per their positive feedback. Though, few modifications on
using simple terms will be made in order to make it clearer and understandable based on the
feedback.
3.8.2. Reliability
According to Khotari (2004), reliability refers to consistency, where internal consistency
involves correlating the responses to each question in the questionnaire with those other
questions in the questionnaire. The reliability of the instrument ascertained using the internal
consistency method. However, this study the researcher will be used Cronbach‟s alpha to
assess the internal consistency of items on the research instrument, which is developed

- 23 -
questionnaire. Cronbach's α (alpha) is a coefficient of reliability will be used to measure the
internal consistency of a test or scale; it resulted as a number between 0 and 1. As the result
approaches to 1, the more is the internal consistency of the items, which means all the items
measure the same variable. Scales were considered reliable if their Cronbach alpha value
reached at least .70 (Najanja and Naiagi, 2013).
3.9. Ethical Considerations
According to Creswell (2012) as the researchers „anticipate data collectors, they need to
respect the participants and sites for the research„„. In the study, the researcher maintained
objectivity, courtesy and high professional standards through scientific process and no
falsification, alteration or misrepresentation of data for biased or other purposes. Thus, the
researcher assures that the research is independent and impartial. The respondents will give
privilege of not writing their names and other identities to hide them from unwanted approach
to maintain by other groups, later on. And also the respondents will be participated
voluntarily by informing the aims and objectives of the study.
Hence, Preceding approval of the questionnaire for the study will be achieved from
Adama city Administration Micro and small business enterprises (MSBEs) office to
undertake the research and essential ethical issues in the study explained regarding: Informed
Consent : Cover letters that explain the purpose of the questionnaire given to the respondents
of the study along with opening explanation on the purpose of the study prior to every
interview session, Confidentiality: The respondent assured that they are not confused, their
responses remain confidential and the information they provide used for academic purpose
only and Organizational Approval: A written letter that explains the research idea is provided
to obtain prior approval from Adama city Administration Micro and small business
enterprises (MSBEs) office to conduct the research activity at the specified customer‟s
location.
Finally, the works uses in the research will be referenced with American Psychological
Association (APA) referencing system.

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Addis ReMSEDA (2009), Micro and Small Enterprises Development Achievement in
Addis Ababa, Addis Ababa: Addis Ababa Trade and Industry Bureau.

doi :10.1353/eas.2006.0002
Churchill, NC, & Lewis, VL. (2006). the five stages of small business growth. Harvard
Business Review, 61(3), 30-50.
Cochran, R. L., and Wood R. A. (1984); Corporate Social Responsibility and Financial
Performance. Academy of Management Journal, 736-742.

Cohen L., Manion L. and Morrison K. (2007). Research Methods in Education, 6th edn.
USA, Routledge
Catherine Dawson. (2009). Introduction to research methods: A practical guide for any one
undertaking a research project, fourth edition, United Kingdom, Books Ltd.
Creswell J. W. (2009): Research Design: Qualitative, Quantitative, and Mixed Methods
Approaches, 3rd edition. Landon, Sega publications.
Central Statistical Agency (CSA) (various years). Report on Urban Informal Sector Sample
Survey. Addis Ababa: various issues, Research Paper No. 2009/51.
Development, prosperity and Good Governance; Genius Training and Consultancy Service,
Addis Ababa, Ethiopia.
Emma .I. Okoye and Akamoibi, Ndidika. L. (2009). Repositioning and micro small
Enterprises (MSBES) in Orumba south L.G.A. of Anambra state. Multidisciplinary
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Ethiopian Micro and small business enterprises Development Strategy (EMSEDS, 1997)
Federal Democratic Republic of Ethiopia. Ministry of Trade and Industry. (1997). Micro
and Small Enterprise Development Strategy.
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Gebreeyesus, M. (2009), “Innovation and Micro Enterprises Growth in Ethiopia”, world
institutefor economic development research.
Gupta, P., Guha, S. & Krishnaswami, S., 2013. Firm growth and its determinants. Journal of
'Innovation and Entrepreneurship, 2(1), pp.5

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Gelfeto Gelassa Titta & Dr B. V. Prasada Rao, 2013 .Assessing the Contribution of
Microfinance Institution Services to Small Scale Enterprises Operation: A Case Study
of Omo MFis, Hawassa City, Ethiopia.
Habtamu Tefera, Aregawi Gebremichael and Nigus Abera (2013). Journal of Economics
and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
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(AACMSEDA). (2012). „Inception Report on Micro and Small Enterprise
Development in Addis Ababa‟, Unpublished Report. Available from
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ILO– International Labour Organization (2000), “Key Indicators of the labor market,” Report
V, Geneva.
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Research. USA, Blackwell Publishing.
Kessy, S. and Temu , S.S 2010 . The Impact of Training on Performance of Micro and small
business enterprises Served by Microfmance Institutions in Tanzania.
Kayanula, D. & Quartey, P. (2000). The Policy Environment for Promoting Small and
Medium-sized Enterprises in Ghana and Malawi. Paper No.15. Institute of
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Developing Countries,”World Development, 26(1):61.
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Medium Enterprises in Addis Ababa.
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Watson, Jeff. (2001). How to Determine a Sample Size: Tipsheet #60, University Park, PA:
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APPENDIX
Work Plan: Thesis Timetable and Budget Required

Table 3: Table Thesis Time Plan

Thesis Time Remark
No Activities Required:
1 Work with thesis supervisor to create a thesis proposal,
complete literature review, and submit application for Dec 22 -
Research advisory committee Feb 5 /2015
2 Research advisory approval and begin research Feb 6 - 30/2015
3 Complete research; analyze the data; begin to write the Mar1 -
thesis Mar 30/2015
4 Write thesis; submit early drafts to thesis supervisor; Apr1 -
work with supervisor on subsequent drafts. Apr 30/2015
5 Submit final draft for approval; receive approval for May1 -
defence; complete defence; complete post-defence May 10/2015
corrections to thesis

Table 4: Thesis Budget Plan

Budget Remark
No
Activities Required
1 Work with thesis supervisor to create a thesis proposal,
complete literature review, and submit application for 3,500
Research advisory committee
2 Research advisory approval and begin research 7,000
3 Complete research; analyze the data; begin to write the
thesis 2,000
4 Write thesis; submit early drafts to thesis supervisor; work
with supervisor on subsequent drafts. 2,500
5 Submit final draft for approval; receive approval for defence;
complete defence; complete post-defence corrections to 7,000
thesis
Total Budget Required for the Thesis work 22,000

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