Motivational Factors Influencing Households’ Participation in Micro and Small Enterprises (MSEs) in Southern Ethiopia

The overall objective of this research was to examine motivational factors influencing households’ participation in micro and small enterprise in southern Ethiopia. Both quantitative and qualitative research method approaches were used and data collected from the respective sources through the questionnaires. The data was collected from 248 respondents. The collected data was analyzed by econometric and descriptive methods data analysis. From 10 variables expected to influence household's motivation to participate in MSE, five (5) variables were found to be the important factors influencing status of household’s participation in MSE in the study area. These variables include household, education, government support, loan access, and initial capital and work experiences of respondents. The education model result reveals that a positive sign and significant at 1% level of significance. Educational status of the households is determinant variable that influences participation of MSE in the area. The possible reasons are the literate people are better to manage; their capacity of accepting change makes them good analysts to participate in MSE. There is significance income difference participants and non-participants of SME. According from econometric results, loan access is determinant variable that influences the participation in the MSE in the area. It would be better for households if any concerned stakeholder gives skill development training how to manage income and saving to increase their capital to participate in SME.