THE FACTOR THAT AFFECTING THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISE: (THE CASE OF DILLA TOWN, GEDEO ZONE)

This research thesis aims to investigate factors influencing the performance of small and medium<br> enterprises with a special emphasizes on manufacturing, construction, agriculture, service<br> sectors in Gedeo zone, Dilla town. For the sake of achieving the objectives of this study,<br> questionnaires were analyzed using statistical analysis such as descriptive analyses. The<br> information gleaned through questionnaire from a sample of 228 operators was conducted of<br> small and medium enterprises. The respondent operators were selected using stratified sampling<br> technique. The empirical study elicited eight major challenges which seem to affect performance<br> of small and medium enterprises in Dilla town which include: inadequate finance, lack of<br> working premises, marketing problems, poor management practices, and technological. The<br> findings further indicate that, there exists linear and positive significant ranging from substantial<br> to strong relationship was found between independent variables and dependent variable.<br> Moreover, the selected independent variables may significantly explain the variations in the<br> dependent variable at 1% level of significance. Based on findings, recommendations to<br> government bodies, to operators of small and medium enterprises and suggestions for other<br> researchers are forwarded. The study examines the impact of five factors on performance of<br> small and medium enterprises. The key finding of this study rejected the first and the third<br> hypotheses. In the last, Provision of training on quality improvement and cost decline modalities,<br> Provision of information on market opportunities, construction of display centers and Provision<br> of advertising support, organize seminars and business drills for these SMEs, support to the<br> SMEs by providing incentives to help them in implementing the corporate governance practices.<br> SMEs, subsidize the interest which SMEs pay on borrowed funds, providing selling and display<br> places in areas close to working area, and suggests some lines of enquiry for further research<br> are some recommended by the thesis.