FACTORS CHALLENGING THE PERFORMANCE OF MICRO AND SMALL SCALE MANUFACTURING ENTERPRISE IN THE CASE OF HAWASSA CITY, ETHIOPIA

ABSTRACT This research aims to investigate factors affecting the performance of MSEs with a special emphasizes on wood work, metal work and textile sectors in Menaharya and Tabor sub-city, Hawassa. For the sake of achieving the objectives of this study; to assess factors that affecting the performance of MSEs in Hawassa city, questionnaires were analyzed by using statistical analysis such as descriptive and inferential analyses. The information gleaned through questionnaire from a sample of 167 operators and face-to-face interviews were conducted with 10 operators of MSEs. The respondent operators were selected by using stratified sampling technique. Besides, the interview questions were analyzed by using descriptive narrations through concurrent triangulation strategy. The empirical study found out eight major challenges that affect performance of MSEs in sub-cities studied which include: inadequate finance, lack of working premises, marketing problems, inadequate infrastructures, poor management practices, and technological, entrepreneurial and politico legal problems including bureaucratic bottlenecks system. The findings further indicate that, there exists linear and positive significant ranging from substantial to strong relationship was found between independent variables and dependent variable. Moreover, the selected independent variables may significantly explain the variations in the dependent variable at 1% level of significance. Based on findings, recommendations to government bodies, to operators of MSEs and suggestions for other researchers are forwarded.