TOSSA COLLEGE OF ECONOMIC DEVELOPMENT

DEPARTMENT OF BUSINESS ADMINISTRATION

MASTERS OF BUSINESS ADMINISTRATION (MBA)

FACTORS AFFECTING PERFORMANCE OF MICRO AND SMALL

ENTERPRISES IN DESSIE CITY

A RESEARCH PROPOSAL SUBMITTED TO TOSSA COLLEGE OF ECONOMIC

DEVELOPMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION (MBA).

BY:

SULEYMAN TSEGAW
ID No: TCED/ 048/13

ADVISOR
BIZUAYEHU AMBAYE (PhD Candidate)

APRIL, 2022
DESSIE, ETHIOPIA
 TABLE OF CONTENTS

Contents
TABLE OF CONTENTS ...........................................................................................................ii

LIST OF TABLES ..................................................................................................................... v

LIST OF FIGURES ................................................................................................................... v

LIST OF ACRONYMS ............................................................................................................ vi

CHAPTER ONE: INTRODUCTION ........................................................................................ 1

1.0 Introduction ...................................................................................................................... 1

1.1 Background of the study .................................................................................................. 1

1.2 Statement of the Problem ................................................................................................. 4

1.3 Research Questions .......................................................................................................... 5

1.4 Objectives of the Study .................................................................................................... 5

1.4.1 General Objectives of the Study ................................................................................ 5

1.4.2 Specific Objectives of the study ................................................................................ 5

1.5 Hypothesis of the study .................................................................................................... 6

1.6. Significance of the study ................................................................................................. 6

1.7 Scope and delimitation of the Study ................................................................................ 6

1.8 Operational definition of key terms ................................................................................. 7

1.9.Organization of the study ................................................................................................. 7

CHAPTER TWO: REVIEW OF RELATED LITERATURE................................................... 8

2.0- Introduction ..................................................................................................................... 8

2.1- Definition of Micro and Small Enterprise ...................................................................... 8

2.2 Theoretical Review of Related Literatures....................................................................... 8

2.2.1. Marketing efficiency of micro and small enterprises ............................................ 9

2.2.2. Market access ........................................................................................................ 10

2.2.3 Marketing communication ..................................................................................... 11

2.2.4. Competition ........................................................................................................... 12

2.2.5. Policy and political environment ......................................................................... 13

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 2.2.6. Business regulations and laws .............................................................................. 14

2.3. Empirical review .......................................................................................................... 15

2.3.1. MSEs in Ethiopian context ................................................................................... 15

2.3.2. Marketing challenges of MSES ............................................................................ 17

2.3.3. EXTERNAL FACTORS ...................................................................................... 18

2.3.4. Internal factors....................................................................................................... 21

2.4. The role of micro and small enterprises ..................................................................... 23

2.5. Objectives of the national MSE strategy .................................................................... 25

2.5.1 Facilitate economic growth and bring equitable development ................................ 26

2.5.2. Creating long-term jobs .......................................................................................... 26

2.5.3. Strengthen cooperation between Mses ................................................................... 26

2.5.4. Provide the basis for medium and large scale enterprises ...................................... 26

2.5.5. Export promotion.................................................................................................... 26

2.5.7. MSE support service provided by city government of Addis Ababa MSE ............ 27

2.6. Conceptual framework of this research ......................................................................... 27

CHAPTER THREE: RESEARCH METHODOLOGY .......................................................... 29

3.0 Introduction .................................................................................................................... 29

3.1 Description of Study Area .............................................................................................. 29

3.2 Research Approach ........................................................................................................ 30

3.3 Research Design ............................................................................................................. 30

3.4 Data Sources ................................................................................................................... 30

3.5. Population, Sample Size and Sampling Technique ....................................................... 30

3.5.1. Target Population of the study................................................................................ 30

3.5.2. Sampling Strategy and Procedures ......................................................................... 31

3.5.3 Sampling Technique ................................................................................................ 31

3.6. Data Collection Methods............................................................................................... 33

3.7 VARIABLES AND MEASUREMENTS ...................................................................... 33

3.8 Method of Data Analysis ............................................................................................... 34

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 3.8.1 Descriptive Analysis ................................................................................................ 34

3.8.2 Inferential Analysis.................................................................................................. 34

3.9 INSTRUMENT DEVELOPMENT ............................................................................... 37

3.9.1 Design of the Instruments ........................................................................................ 37

3.9.2 Instrument Validity .................................................................................................. 37

3.9.3 Instrument Reliability .............................................................................................. 38

3.10 ETHICAL CONSIDERATIONS ................................................................................. 38

BUDGET ................................................................................................................................. 39

REFERENCE ........................................................................................................................... 40

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 LIST OF TABLES
Table 3-1: Total Target population of the study ..................................................................... 31
Table 3-2 : Sample size selections under each stratum .......................................................... 33

LIST OF FIGURES

Figure 2-1: conceptualframework of the study...................................................................... 28

Figure 3-1: Location map of study area ...................................................................................... 29

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 LIST OF ACRONYMS
BDS Business Development Service

FMSEDA Federal Micro and Small Enterprises Development Agency

GTP Growth and Transformation Plan

ILO International Labour Organization

IMF International Monetary Fund

MoFED Ministry of Finance and Economic Development

MSE Micro and Small Business Enterprise

MSME Micro Small and Medium Enterprises

OECD Organization for Economic Cooperation and Development

UN United Nations

UNCTD United Nations Conference on Trade and Development

UNIDO United Nations Industrial Development Organization

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 CHAPTER ONE: INTRODUCTION

1.0 Introduction
This chapter discusses and presents an introduction to the study which includes background
of the study, statement of the problem, the basic research questions and intended objectives,
significance of the study, scope of the study and limitations of the study, operational
definition of terms and organization of the study

1.1 Background of the study

In many countries there is a varies recognition of the contribution of Micro and Small
Enterprises(MSE) to economic growth. Recently the role of MSE in economic growth,urban
poverty reduction and employment creation have engaged most of the discussions among
government,policy makers and academicians. Wolde and Geta(2015) in their research
paper stated that in most fast developing countries MSE by virtue of their
size,location,capital investment and their capacity to contribute for urban poverty reduction
and generate greater employment have proved their powerful effect for rapid economic
growth. As per UNDP study conducted on 2015 SMEs are widely recognized tocontribute
towards promotion and development of inventions, and there by generate employment
opportunities for developing countries.

As stated by ILO, (2005) in Ethiopia until1997,there were no organized policy and

support system scatering to the development of the MSE ssector. Challenges, Opportunities
and Prospects Premises, markets, finance, supply arrangements, regulatory barriers and
legitimization of entrepreneurial activity are among the most urgent. However, Mekonnen
(2014) described that recognizing the significance of this sector,the Ethiopian Government
issued the National Micro and Small Enterprises Strategy in 1997 and established the
Federal Micro and Small Enterprises development Agency in 1998. The country„s
industrial policy in 2003 and the poverty reduction strategy in 2006 have singled out MSEs as
major instruments to create aproductive and vibrant private sector and reduce poverty among
Rural and urban dwellers(Mulu,2009).

Furthe rmore; promoting this sector has inevitable contribution in reducing poverty in general
Growth and Transformational Plan(GTP) in particular. Micro and small enterprise have
been performing under capacity and their growth has been severely constrained by number
of factors like lack of market, financial business information; lack of business premise;
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low ability to acquire skill and managerial expertise; low access appropriate technology and
poor access to quality business infrastructure(FRDoLoc,2013). The Micro and Small
Enterprises sector is identified as a tool in bringing about economic transition by efficiently
using the skill and talent of the people with out requesting high-level training, much capital
and sophisticated technology ,(Wolde&Geta,2015). The sector is also described as the
national home of entrepreneurship, they are the primary vehicles by which new entrepreneurs
provide the economy with acontinuous supply of ideas, skills ,and innovations,
(Katua,2014).It provides the ideal setting, enabling entrepreneurs to exercise their talents
to the full and attain their goals. In all the successful economy, they have seen as an
indispensable spring board for growth, job creation, and social development at large.

The MSE also seen as an important force to generate employment and more impartial income
distribution, to activate competition, exploit niche markets, increase productivity and
technical change, and through all of these stimulate economic advancement. In a cross-
section of both developed and developing economies, the contribution of the MSE sector to
total employment ,entrepreneurship ,and innovation can not be under valued. As indicated in
the concept not eprepared for EU104 session of the international conference by ILO, June
2015, in the OECD countries MSE represents more than 95 percent of all firms and account
for around 46 percent of total employment. In the EU, legally registered micro and small
enterprises contribute to about 50 percent of total employment.

For example, this sector generates about 6.2 percent of the aggregate employment in the
United States ,22.3 percent in China, about 80 percent in India, 67 percent in Japan and
about 70 percent in EU countries (Carter and Jones-Evans ,2004).To further comprehend
the social and economic importance of micro and small enterprises, one UN study indicated
that the sector represented 99 percent of all enterprises and provided around 65 million
jobs in EU countries (UNCTD,2001).

From the stand point of developing countries, MSE have a number of rewards that make
them attractive in hastening economic development .Firstly, because MSE are fairly labor
intensive, employment opportunities generated with a relatively low capital cost, a factor
with limited supply in many developing nations. Then, they apply raw materials and labor-
intensive technology that are locally available. Thirdly, policies and programs can put in
place to encourage the development of these industries in different parts of the country there
by reducing concentration of enterprises in certain areas and promoting balanced economic
growth.

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As per UNDP study conducted on 2015 SMEs are widely recognized to contribute towards
promotion and development of inventions, and there by generate employment opportunities
for developing countries. With in the Ethiopian context, despite the potential contribution of
the MSE to poverty reduction and employment creation is widely recognized, the
Government until very recently will be extended adequate support to the development of the
sector.Recent research work by(Anteneh,2017) indicated that in Ethiopia there has not
been an independent assessment of the contribution of the MSE development strategy to
poverty reduction, job creation and business growth either at the federal or regional levels to
date. MSEs are particularly important in the context of the country‟s poverty reduction
strategy because they are seed bed 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.

Dessie city is one of areas in Amhara National Regional state as capital for South Wollo
Zone administration ,it faced many problem related to MSEs.The evidence of 2021 /2022
annual report of MSEs indicated and also my obeservastion.Such an understanding of the
pre requisites for town MSEs to perform well in their businesses is critical importance
especially intoday‟s competitive environment. Thus, this paper will tries to assess the
different policy, financial and operational determinant factors affecting MSE growth in
Dessie by assessing the key MSE‟s performance factors of some selected enterprises who
are working in Segno Gebeya,Arada and Bwanbawa wuha sub-Cities in Dessie
Administration.

Recognizing the expansion behaviours of MSEs is quite heterogeneous. The basic aspire to
comprise this research is to recognize and examine factors that affect the growth of MSEs. In
this survey growth of MSEs was measured with sale and accessibility of external business
environment. And major issues were recognized that control growth of MSEs.

Despite a strong empirical support for investigating the Factors Affecting Performance of
Micro and Small Enterprises in developing countries (Mohammed, 2021),), researches on
this area in Ethiopian context are scanty. To the best of the researcher knowledge, no
previous researches have been directly addressed the factors affecting the Performance of
Micro and Small Enterprises in the Ethiopia in general and in Dessie city in particular.
Therefore, this study attempt to partially feel this empirical research gap in Ethiopian context
by identifying factors affecting Performance of Micro and Small Enterprises in Dessie city
administration.

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1.2 Statement of the Problem
Micro and Small Enterprises Sectors contribute to economy development of nations by
creating employment opportunities, production of goods and services and other value added
activities. Micro & Small Enterprises caught the attention of development practitioners and
policy makers recently not only because of its importance in terms of generating employment
also because of various other attributes. Some of these are: Micro and Small Enterprises are
breeding ground for entrepreneurs, the sector has high employment generating capacity, and
is less capital intensive and it is highly competitive, flexible, and innovative (Anteneh,2017).
Even though, the number of MSE increasing in an increasing rate, the status of their
operation remained low.

According to Anteneh (2017), Majority of MSE operators rated infrastructure access has
not been improved and hugely affecting their performance; getting working premises is
still a time consuming and challenging task for them. Credit access for MSEs is limited;
institution involved in providing loan are also limited.

A research finding done by Mohammed (2021), also identified that challenges of

financial facilities, marketing networks, infrastructural faculties, management efficiency
as well as socio political situations had very high possessions and negative effect on the
evolvement of the studied area MSEs.

Dessie city has several Micro and Small Scale Enterprise that organize their business
under MSEs Development program manufacturing, construction, service, trade and urban
agriculture before 2015 still most of enterprises were remain at micro and small
enterprise.

Additionally MSEs in particular have still remained relatively little in its job creation to
other sectors in town administration economy. These show as there is internal and
external factors that affects their performance (Dessie city MSEs Office annual report
2019/2020) and also my observations. Such an understanding of the pre-requisites for
town MSEs to perform well in their businesses is critical importance especially in today‟s
competitive environment.

Thus, this research will try to fill the gap which was not addressed by previous
researchers by taking in to account the registration procedures of business enterprises, not
qualities of one stop shop centre service delivery , market linkage, and access to training

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facilities, not advantageous location , high rate interest rate , collateral security that
improve the performance MSEs.

Understanding of why some firms succeed and others not is crucial to the stability and health
of the economy. Despite this fact, however, which factors are the most important to the
success of MSEs sector in Ethiopian has not been adequately studied empirically. So this
study will try to assess selected success or failure factors with the performance of Micro and
Small Business Enterprises in Dessie Town.

1.3 Research Questions

This study will be guided by the following research questions:

What are the sources of finance or funds available to the MSEs?

What are the various contextual factors that will be impeded the performance of the
MSEs?
What are the internal factors that affect the performance of MSEs?
How does the performance of MSEs currently look like based on business practice in
Segno gebya,Arada and Buabua wuha sub city?
How can be the problems of MSEs in Seghnoge, Arada and Bonebowawuaha sub-cities
minimized?
1.4 Objectives of the Study
1.4.1 General Objectives of the Study
The general objective of this study is to assess the major factors affecting performances of
micro and small enterprises in Dessie city Administration.

1.4.2 Specific Objectives of the study

The specific objectives of the study will be:
To examine the sources of finance or funds available for the start-up and the expansion of
MSEs.
To investigate the contextual factors that affects the performance of MSEs.
To assess the internal factors that affects the performance of MSEs.
To recommend possible solution to alleviate the problem of MSEs

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1.5 Hypothesis of the study
With the help of sufficient and appropriate empirical data on the factors affecting the
performance of MSEs, this study will test the following hypothesis:
: The business environments of Ethiopia aimed at MSE development do affect the
performance of MSEs in the selected manufacturing sector of Seghnoge, Arada and
Bonebowa wuaha sub-cities
: The business environments of Ethiopia aimed at MSE development do not affect the
performance of MSEs in the selected manufacturing sector of Seghnoge Arada and
Bonebowa wuaha sub-cities

1.6. Significance of the study

The result of this research will come up with major concerns that hinder the performance of
micro and small business enterprises performance and provide policy recommendations based
on the research finding. In addition, the observations and findings in this research will be
preliminary that could explore different policy, financial and operational factors that
contributed MSEs to grow, flourish, and support the economy. Hence, this study may serve as
a basis for other researchers to conduct a comprehensive analytic research work on micro and
small enterprises performance on the entire city.

1.7 Scope and delimitation of the Study

The study assessed factors influencing the performance of MSEs in dessie particularly in
segno,arada and buanbua wuha sub city. There are 5 sub cities in dessie where a number of
MSEs were operating. But due to time and finance constraints the researcher limited to only
in three of the sub cities and since alarge number of MSEs are found and high concentration
area in the selected s u b city. The scope of this research was being delimited to its scope only
to those enterprises which are categorized as Micro and Small in dessie city. It takes the
sample of the study only from those Micro and Small Enterprises operating in three Sub City
Administrations in dessie involving extent to which stated success variables affect their
performance. Although, there are different factors that affect the performance of MSEs, this
study is delimited to government regulation, business information service, management
experience of the owners, marketing strategy and financial control mechanism of the
principal owner. In addition, difficulty during data collections & lack of up-to-dated
information, the findings of this study cannot necessarily represent for all MSEs Sectors &
similar to these business MSEs in the country, because the sample is not being presentation of
the entire Mses. Therefore, the results cannot be taken as uniform to generalize for MSES

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those will not part of this study. The instruments will be developed by the researcher based
on the literature & limited to descriptive statistics which needs more statistical tests in order
to establish a more robust validity and reliability. Thus the instruments could be further fined
to more closely capture each of the problem areas identified in the literature. Replication of
this study using larger samples broader geographic, longitudinal wide study is suggested for
cross-validation purpose.

1.8 Operational definition of key terms

 Cooperatives: association of at least 10 individuals who are from the same area.
 Enterprise: It refers to a unit of economic organization or activity whether public or
private engaged into the manufacturing of goods
 Formal enterprise: are defined as establishments principally engaged in production
ofregistration, license and tax frameworks
 Micro enterprise: means commercial enterprise whose capital is not exceeding birr
20,000 other than high technology and consultancy services.
 Performance: in this paper performance defined in terms of profitability of the MSEs.
 Small enterprise: means a business engaged in commercial activities whose capital is
exceeding birr 20,000 and not exceeding 50,000 birr, other than high technology and
consultancy service institutions.

1.9.Organization of the study

The final research paper will be organized as follows; following the introduction chapter,thes
seccond chapter provides an over view of related literatures.The third chapter dedicated on
the research design and methodology applied for this research work, followed by the fourth
chapter data presentation analysis, and interpretation .The last and fifth chapter will
provides conclusion and recommendation

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 CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0- Introduction
At this chapter, the researcher reviewed some theoretical and empirical work on Micro and
Small Scale Enterprises, which has received a great deal of attention in contemporary
development literature and national plans of developing countries. This is because, It has
been realized that most countries have programs to develop this sector of the economy since
it is believed that this sector is the engine of growth for every economy and especially in all
developing countries like Ethiopia. Further to this, there will be some conceptual works,
which will be using to support the study

2.1- Definition of Micro and Small Enterprise

There is no single and universally acceptable definition of a small enterprise. 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. A definition forwarded for MSE differs from country to country,
depending on the stages of economic development and population. In USA and Europe MSE
defined on the bases of number of employment and turnover. European Commission and
Organization for Economic Cooperation and Development defines MSE as having below 250
employees (Habtamu Mulugeta, 2010).

2.2 Theoretical Review of Related Literatures

The interest in understanding formal institutions MSEs linkage and its implications
requires acritical understanding of the business's activities and its relationship with the
concerned actor using different theoretical approaches. According to Johnetal(nd,p.7), small
firms performance requires internal and external relationship the rebyestablish business
networks. Firms being micro and small face problems indevelopment phases. Therefore,
differen tresources and supports from different actors in their different stages of business
growth are essential. This support can be acquired through “personal and institutional
networks” to get market access and work place premises, resources and advanced production
techniques from different actors.

Bereket(2010) stated academicians, politicians and development economists have supported

the promotion of micro and small business enterprise towards job creation, poverty
reduction, innovation etc. With the increasing unemployment and poverty, micro and small
enterprises come to the front in employment creation and income generation. Hence, the

8
sector is believed to be able to fill the gap that exists between the poor and the rich
indeveloping countries regarding income generation and, unemployment rate. Successful
small businesses are the primary engines for economic development such as income growth
and poverty reduction in many of the developing countries. These businesses can also
build foundation for stable communities and gendere quality. Reviews of studies in the
area also confirm that the contributions of MSEs have long be enrecognized all over the
globe. The study by A.Nyangor(2010) indicates that Micro and small enterprises are a major
source of entrepreneurial skills, innovation and employment.

In the enlarged European Union of 25 countries, some 23 million MSEs provide around 75
million jobs and represent 99% of all enterprises. MSEs as the main source of employment in
developed and developing countries nearly alike, comprising over 90% of African business
operations and contributing to over 50% of African employment

As stated by MoUDC (2013), small enterprises along with medium are major derivers of both
employment and economic growth contributing to more than 50% to GDP and 60% to
employment indeveloped economies. These types of enterprises, however, constitute less
than 30% of employment and 17% of GDP indeveloping countries. Hence, it is possible to
under line that Micro and Small enterprises play significant roles in the creations of
employment opportunities and contribution to growth of GDP indeveloping and developed
countries.

LaManchaSims(2013) stated in general sense that marketing helps increase sales. If you
have done you rmarketing right, chances are that any potential clients would be able to
instantly recognize your branding efforts, separating your company from your
competitors and increasing the likelihood for them to become a future client or make a
purchase. At this point, your clients can also become apart of your marketing campaign by
writing positive comments about your company and its services or products on social media
as well as recommending your company to friend‟s relatives and other business associates
and you may see the sales increasing exponentially as word spreads.

2.2.1. Marketing efficiency of micro and small enterprises

Marketing is acrucial factor for success of business. MSEs may offer the best products or
services, but with out marketing none of potential customers would know about it and sales
may crash and they may have to close Marketing allows you to compete with larger
competitors.

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Accordingly, good Marketing efficiency allows small businesses the opportunity to compete
with well-known larger corporations and compete for their market share. Smaller businesses
often have an advantage over larger companies because of the greater amount of personal
attention they can provide to each client. Good customer service and areal sense of value are
more important to clients than the lower rates they may pay for the services or products of
larger companies (Sims2013).

2.2.2. Market access

Access to market can be related to location and transportation facilities where large buyers
can participate in buying. Primarily, some products of the MSE may be produced and
consumed by local markets. But some enterprises such as milk and milk product, poultry,
fruits and vegetables sell to their surrounding market and neighboring Towns or zones. Hence,
transportation facilities have a vital contribution for being finding new markets at new places
and importing cheaper raw materials from where it widely available which resulted in using
cheaper raw materials for reducing costs of production which inturn decrease the price for
products and then increase market demand and revenue of enterprises. In addition to
transportation facilities, location of the business can play acentral role in marketing of MSEs.
Those MSEs located in urban and nearer to urban or commercial areas are more likely to
survive than their counters in rural areas. Those that operate in commercial districts or on road
sides typically show greater growth rates than those that are based on their home, although it
can vary at the country level (Liedlholm,2002).

According to Sgustafson (2012), economic growth indeveloping countries is often constrained by

lack of access to regional and global markets. With out reliable access to fair, transparent to
markets, the poor indeveloping countries stand little chance of escaping poverty and hunger.
Furthermore, Enterprises can provide quicker delivery to buyers if they are closer to buyers
than are producers. However, the reare various constraints to market access of which some are
Poor infrastructure, location of the business itself, problem of proximity to buyers.

Clough(2011) stated that location of the business can play a role in their customer reach. If a
business located on a main route people from other towns may purchase their products and
recommend them to other people further away. For businesses located in rural areas there are not
always as many institutions and commercial businesses close by compared to those in more urban
areas or commercial centers and they may rely on local house holds as their main source of
customers.
Geographic location has its implications for access to markets and other resources like
finance, skilled labour subcontractors, infrastructure, distribution and transport logistics

10
and other facilities. ME success also depends on neighbourhood appearance and
continued or maintained future business operations in that location (Tustin,2001) Keble
(1997) also predicted that MSEs located in urban areas typically have a relative ease of
access to customers and the inputs required to produce goods or services. MSEs located in
urban areas may benefit from agglomeration economies and spatial externalities (i.e.
specialized infrastructures, information, network of suppliers, specialized labour,
specialized knowledge, concentration of existing exporters, etc). Stresemann (1987)
suggests that home-based enterprises in commercial areas generate more income than
similar enterprises in more remote areas.

2.2.3 Marketing communication

The study by OECD (2005) suggested that to reach a target market, the marketer uses
three kinds of marketing channels. Communication channels deliver messages to and
receive messages from target buyers. They include newspapers, magazines, radio,
television, mail, telephone, billboards, posters, fliers, CDs, audiotapes, and the Internet.
Beyond these, communications are conveyed by facial expressions and clothing, the look
of retail stores, and many other media.

Marketers are increasingly adding dialogue channels (e-mail and toll-free numbers) to
counter balance the more normal monologue channels (such as ads). The marketer uses
distribution channels to display or deliver the physical product or service(s) to the buyer
or user. There are physical distribution channels and service distribution channels, which
include warehouses, transportation vehicles, and various trade channels such as
distributors, wholesalers, and retailers.

The marketer also uses selling channels to effect transactions with potential buyers.
Selling channels include not only the distributors and retailers but also the banks and
insurance companies that facilitate transactions

Marketers clearly face a design problem in choosing the best mix of communication,
distribution, and selling channels for their offerings. Major factors determining marketing
channels according to OECD (2005) are:-
a)urban infrastructure
Infrastructure is related to provision of adequate access to roads and telecommunication.
It has been a main restraint in the development of MSEs. If the government failed to
provide infrastructural framework it gets difficult to bring development and growth within

11
MSEs. Frequent water shortages, power rationing and the high cost of electricity
experienced in a country, can hinder growth for MSEs given that most modern processes
are electrical. The availability of proper infrastructure will have positive effects to
marketing manage strategies that can influence marketing performance of MSEs.
(Ardjouman& Asma, 2015).
b) Supply chain
Where as marketing channels connect the marketer to the target buyers, the supply chain
Describes longer channel stretching from raw materials to components to final products
that are carried to final buyers. For example, the supply chain for women„s purses starts
with hides, tanning operations, cutting operations, manufacturing, and the marketing
channels that bring products to customers. This supply chain represents a value delivery
system. Each company captures only ascertain percentage of the total value generated by
the supply chain. When a company acquires competitors or moves up stream or
downstream, its aim is to capture a higher percentage of supply chain value. (Kotler,
2000) .

2.2.4. Competition
Competition, a critical factor in marketing management, includes all of the actual and
potential rival offerings and substitutes that a buyer might consider. Competitiveness is a
complex concept, long debated in the worldwide specialized literature.

There are noticed many ways in which the reisde fined competitiveness of the company,
but no definition is universally accepted. Beingin separable from the notion of competition,
the concept expresses at general level, the ability of individuals, companies,economies,
regions etc.; to remain in the internal and/ or international competition and to obtain
economic benefits from it. For the company, the competitiveness concern sitsability to
increase profits in market shares where it operates, context in which firms seek strategies to
adapt to business environment and try to identify their competitiveness factors: improving
quality standards, developing new products and production processes, adopting modern
technologies etc.(Kotler, 2000) As interior feature of an economic entity, the competitiveness
is defined by company‟s potential and occurs in relation with the environment in which it
operates. Competitiveness means,essentially, the liability and skill for market contention and
the skill for position gain and permanent commitment that are indicated especially by
expansion of business successfulness, market share and profitabilityǁ (Markovics,2005).

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Competitiveness is determined by productivity, and depends on firms strategies, it is
partially, the result of relationship between firms and local business environment, depends
on social and economic objectives synergy and is influenced by factors from external
environment (Porter and Ketels, 2003).

Enterprise‟s competitiveness is the ability to sustain a market position by supplying

quality products on time and at competitive prices. This ability is reflected by acquiring
the flexibility to respond quickly to changes in demand and by successfully managing
product differentiation by building up innovative capacity and an effective marketing
system (UNCTAD, 2005).

It is stated in the study of UNCTAD, (2005) that since the company has to face both
domestic/indigenous competitors and foreign/ international ones in each market where
penetrates; an analysis is needed to identify the behaviour of these competitors of the
company and in this context, a more accurate assessment of their potential. Clearly, the
number, size and quality of competitors influence the firm's ability to enter and compete
profitably in a particular market and its competitiveness requires strengthening of its
activity in a particular market, the existence of a strategy to maintain or increase market
share through marketing elements which allow maximizing the strengths that distinguish
it from the other competitors.

Bouazza, (2015) suggested unfair competition arising from the low cost of doing business
in the informal sector is a serious challenge for a significant section of MSEs, especially
small sellers and producers. In addition, unfair competition from companies operating in
the non-official sector is a serious challenge affecting both MSEs and large firms in the
any economy.

2.2.5. Policy and political environment

A stable macro-economic and political environment has been shown to positively affect
private sector development. Economic and/or political instability increases the number of
risks that entrepreneurs face in their daily operations. Especially for micro and small
enterprises, high risk environments render planning nearly impossible and prevent
important investments in productivity enhancing and job creating activities from being
undertaken.

To sustain macro-economic stability there exists a wide agreement that stable growth, a
stable inflation rate and healthy public balance sheets are essential (Ocampo, 2005).

13
Thus, both political and macro-economic instability are regarded as obstacles to the
creation of productive jobs within MSEs.

2.2.6. Business regulations and laws

The regulation of businesses by laws, policies, and incentives influences economic
activity in manifold ways. It is widely acknowledged that there is no optimal approach‟ to
regulation, meaning that the intensity or the scope of regulating business to business and
state to business relations is largely dependent upon local conditions, private sector needs
and the interests of national policy makers (Reeg, 2015). With regard to the regulation of
MSEs, governments find themselves in a position where they have to reconcile three
conflicting goals: they have to foster enterprise grown than deployment growth; they have
to increase or ensure job quality; and they have to encourage formalization. Business
regulations affect whether a firm registers itself, may enhance a firm‟s investments in
human or physical capital, and can deter or stimulate the adoption of new technologies.
Regulations and policies are set in place to protect (intellectual) property rights, enforce
contracts, settle disputes and ensure that private companies up hold certain standards and
contribute to common goods such as public education, Education and entrepreneurship
skill. Entrepreneurship is recognized as an important driver of economic growth,
productivity, innovation, and employment.

Entrepreneurship is related to the functional role of entrepreneurs and includes

coordination, innovation, uncertainty bearing, capital supply, decision-making,
ownership, and resource allocation in their organization (Munyori&Ngugi,2014).
Most of the prevalent area in which MSE faces a problem are sales or marketing ,human
resource management, and general marketing research and training (Kefale & Chinnan,
2012).

The growth of a firm is, to a certain extent, does individual entrepreneur make a matter of
decisions. This is very much pronounced for MSEs that are run by owner managers.
Personality traits, motivation, individual competencies and personal background are
important factors for the success/failure of MS (Baum,Locke,& Smith,2001;Shane,
Locke, Collins,2003).

Schooling is important personal background that influences MSE performance and

growth. Education helps entrepreneurs to make good judgments, best use of information,
exploit opportunities well leading to firm growth and success. Study conducted by

14
Goedhuys and Sleuwagen (2000), argue that higher education not only raises enterprise
performance, but also increases outside options such as wage employment. Lower
education and vocational training significantly influenced the likelihood of being
entrepreneurs rather than wage employees.

Higher education was found to influence post entry firm growth (Goedhuys
&Sleuwaegen, 2000) Marketing problem has been widely acknowledged as being the
most important of all activities and critical for the survival and growth of MSEs.
However, many studies found owner/managers of MSEs as having a very limited
understanding of the marketing concept generally to be little more than advertising and
public relations and lacking adequate marketing skills. Specifically, MSEs frequently
encountered problems in promotion and marketing research. These problems include the
selection of promotional media, low purchasing power of customers, advertising, content
design and format of the promotional materials, market size, location and addresses of
potential customers (Kefale & Chinnan, 2012). Lthand the environment (Klein &
Hadjimichael,2003)

2.3. Empirical review

Empirical studies show that many constraints have been facing MSEs in most developing
economies are unfavourable legal and regulatory environment and, in some cases,
discriminatory regulatory practices, lack of access to markets, finance, business
information, lack of business premises at affordable rent, low ability to acquire skills an
managerial expertise; low access to appropriate technology, and poor access to quality
business infrastructure (CSA, 2003).

Malhotra et al (2006) goes some way to confirm the above explanation that lack of access
to finance is hampering the growth and competence of MSEs. Studies conducted by
World Bank (2008) concluded that the problem of MSEs are access to working capital,
inadequate infrastructure, high transactional cost, limited managerial and technical experts
and marketing problems.

2.3.1. MSEs in Ethiopian context

As stated by ILO, (2005) in Ethiopia until 1997, there were no organized policy and
support systems catering to the development of the MSEs sector. Challenges,
Opportunities and Prospects Premises, markets, finance, supply arrangements, regulatory
barriers and legitimization of entrepreneurial activity are among the most urgent.

15
However, Mekonnen (2014) described that recognizing the significance of this sector, the
Ethiopian Government issued the National Micro and Small Enterprises Strategy in 1997
and established the Federal Micro and Small Enterprises development Agency in 1998.
The country „s industrial policy in 2003 and the poverty reduction strategy in 2006 have
singled out MSEs as major instruments to create a productive and vibrant private sector
and reduce poverty among Rural and urban dwellers. Creating employment opportunities,
production of goods and services and other value added activities year Growth and
Transformation Plan envisages ensuring faster and sustained development of the
industrial sector and enabling the sector to gradually play a key role in the economy. To
this end, particular emphasis is given to the promotion of micro and small enterprises as
well as supporting the development of medium and large scale industries. Focus is laid on
creating favourable conditions to export oriented and import substituting industries so as
to accelerate structural changes in the sector (MoFED, 2012) Even though particular
emphasis was given the problem of raw material shortages, lack of working capital and
effective marketing practices faced by micro and small skill up grading programs for
MSE operators, strengthening the use of appropriate modern technologies that boost their
capacity to create long-term jobs, and export markets. These support programs as
described by Mulate, Fantu and Tadele (2006) are stated as follows: Facilitating economic
growth and bring about equitable development: It is argued that
The expansion of MSEs stimulates economic growth using manufacturing industries
result in the failure of these businesses to expand .The same problems, when experienced
by informal sector operators, have the effect of preventing their expansion almost from
the beginning of their operations. It was also observed that for about 50 present of
informal sector operators, the first major difficulty when starting their operation was the
lack of sufficient initial capital and this problem becomes more critical when the informal
sectors operators intended to expand their businesses. (CSA, 2003)

Empirical studies in Ethiopia indicate also that economic roles of the Micro and small
enterprises in the country show significant changes in this decade. Mulate, Fantu and
Tadele (2006) stated that Micro and small enterprises are playing vital role as a major
source of entrepreneurial skills innovation, employment opportunity, and generations of
income for many people. Hence, support service programs are developed to alleviate the
financial problems of MSEs through credit availability and improve market access to
large business purchases which include local resources and is the basis for equitable

16
distribution of income and wealth. Create long-term jobs: Although MSEs are largely
labour-intensive, i.e., reduce unemployment; they are characterized by low productivity
and return. It is, therefore, essential to upgrade their skills and strengthen use of
appropriate modern technologies to improve their capacity to create more jobs.
Strengthen cooperation between MSEs: Promoting inter-sectorial linkages within MSEs
and between MSEs and medium and large scale enterprises are the key for overcoming
constraints in the area of resources.
Provide the basis for medium and large-scale enterprises: It is generally argued that MSEs
are the bedrocks for the growth and development of medium and large scale enterprises
and stimulate indigenous entrepreneurship.
Promote exports: Because MSEs depend heavily on domestic raw materials, the strategy
also pays due attention in helping MSEs to participate in international market in which the
country has relatively comparative advantage e.g. leather and leather products, textiles,
horticulture, etc. Balance preferential treatment between MSEs and bigger enterprises:
The strategy aims at correcting the preferential treatment given to bigger enterprises and it
also aims at achieving the greatest possible cooperation and interaction between the
various enterprises in the economy.

2.3.2. Marketing challenges of MSES

Scholars have used different approaches to identify the factors affecting the growth of
Small firms, however there is considerable variation in the results of previous researches.
As stated by A.Nyangor, (2010), lack of access to credit, inadequate managerial and
technical skills, low levels of education, poor market information, inhibitive regulatory
environments, lack of access to technology, lack of infrastructure such as roads, adequate
power, water, sewerage and telecommunication has been a major constraint in the
development of Small and Micro Enterprises. According to Coad (2007), the growth of
small firms is a particularly erratic phenomenon.

Entry rates of new firms are high; however, a large number of these entrants can be
expected to go bankrupt within a few years. Bertelsmann (2005) analyse the post-entry
performance of new firms in seven Organizations for Economic Cooperation and
Development(OECD) countries, the results revealed that about 20-40 present of entering
firms fail within the first two years, while only about 40-50 present survives beyond the
seventh year. One of the reasons they do not survive, as stated by Bertelsmann, is that
they face several obstacles (Challenges) over time. Challenging factors of Marketing can

17
roughly be divided into two groups: internal factors of the firm and external factors that
are beyond the control of the MSEs.

2.3.3. EXTERNAL FACTORS

Researchers have used different approaches to explain external factors affecting
Marketing efficiency and in turn the growth of MSEs. Some of them have a big impact on
the performance and growth of small firm„s (Lumpkin an Dess, 1996). Major external
factors affecting Marketing efficiency of MSEs are further explained below.
i. legal and regulatory factors
According to Lumpkin and Dess, (1996) the growth of MSEs are affected by its business
climate. Clement et al., (2004) noted that an unfavourable business climate has negative
effect on small firm growth. Brown (2007) identified competition as one of the major
hindrances to the growth of small firm. Davidsson (1989) noted that an unfavourable tax
system and 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, StJean (2008)
noted that unfair competition from the informal sector, cumber some 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, competition
from the informal sector, and inadequate infrastructure, especially an insufficient or
unreliable power supply, whereas informality is a major hindrance of MSEs in middle-
income countries, an inadequate power supply is the most important challenge for
companies in low-income countries.

High tax rates can reduce firms „internal sources of financing Competition from the
informal sector and corruption among government officials also pose significant
challenges for firms. Objective measures of the size of the informal sector, barriers to
entry into and exit from the formal market, and the existence of informal payments shed
light on the importance of these obstacles to the existence of MMSEs (Khrystyna
Kushnir, Melina Laura Mirmulstein, and Rita Ramalho, (2010).

18
Bouazza (2015) stated that MSEs in developing countries suffer more than large firms
from many policy and institutional constraints arising from imperfect markets, and, as a
consequence, they benefit disproportionately from reforms. Because of savings on
registration and licensing costs as well tax evasion, non-official companies gain a
substantial cost advantage that can allow them to produce and sell goods at a low price
compared to companies that operate in the formal sector, which prevents genuine
competition and increases the relative costs of the formal firms.
ii. Infrastructure
Infrastructure relates to provision of adequate power, access roads, telecommunication,
sewage, and water. It has been a main restraint in the development of MSEs (Dondo&
Mutiso, 2007). If the government failed to provide infrastructural framework it gets
difficult to bring development and growth within MSEs. Ardjouman (2014), suggested
frequent water shortages, power rationing and the high cost of electricity experienced in a
country, can hinder growth for MSEs given that most modern processes are electrical .The
availability of proper infrastructure will have positive effects to marketing manage
strategies that can influence marketing performance of MSEs.
iii. Local Supply
Suppliers form an important link in the company„s overall customer value delivery
network. They provide the resources needed by the company to produce its goods and
services. Supplier problems can seriously affect marketing. Marketing managers must
watch supply availability and costs. Supply shortages or delays, conflict, and other events
can cost sales in the short run and damage customer satisfaction in the long run. Rising
supply costs may force price increases that can harm the company„s sales volume (Kotler,
2012).
Many manufacturers depend on raw materials supplied from outside sources. Some of the
factors that can delay or hamper a regular delivery schedule include a glitch at the site of a
supply source, problems with transportation or inclement weather. If supplies are not forth
coming as needed, the potential for shut down or a major slowdown in the manufacturing
process can result. Hence, the fate of such enterprises depends on access and level of local
supply from the surrounding. The fluctuation of local supply may therefore make it
difficult to plan and that may precipitate same stock that may destabilize the setup
(Kotler, 2012)

19
iv.Financial Factors
Shah (2013) explained promotion and expansion of business is impossible without
sufficient finance. Lack of access to external financing is one of the major challenges to
the growth of MSEs, and it has accounted for high rates of failure among those MSEs.
Financial institutions be have more cautiously when providing loans to MSEs and MSEs
are usually charged comparatively high interest, high collateral and loan guarantees.
Krasniqi (2007) finds that loan policies and collateral requirements discourage firms from
obtaining loans from banks. In consonance with Berge and Udell (1998), Galindo and
Schantiarelli (2003) find that in both developing and developed countries, small firms
have less access to external financing, which leads small firms to be more restrained in
their operations and growth compared to large firms.

A study done by Beck (2005) in developing countries provides further evidence that
MSEs face greater financing obstacles than large firms do. Ayyagari (2006) show that
financing, crime, and political instability directly affect the rate of growth of small firms,
with financing being the most significant constraint affecting small firms„ growth.

Rocha (2010) analyse the most binding constraint on firm growth in developing countries.
They find that each country faces different sets of constraints and that these constraints
also vary by firm characteristics, especially firm size. However, across all countries,
access to financing is among the most binding obstacle while other obstacles appear to
matter much less. The internal finance has an important part in financing of MSEs, at the
same time numerous studies have confirmed that enterprises have recourse to external
finance when they can„t satisfy their own financing requirements with internal finance. In
the case of external finance, the enterprises draw on cash from external organizations and
investors.

Examining the external finance, the public offering and the bond issue is not characteristic
to this sector, because of its high cost and big time-consumption, and the trade debt and
trade credit are applied occasionally depending on the deal position of the enterprise. In
the case of external debt the role of the bank loan and overdraft, the leasing and the
factoring (and for feting) can be emphasized, but this enterprises can get loan and
overdraft just by higher interest and collateral because of the relatively high cost of the
credit assessment and higher operating risks. To sum it up it can be declared, that the
MSEs are in more disadvantageous situation than the large size enterprises on the
admittance of financing sources with respect to both equity and debt.

20
v. Technical Factors
Small businesses are constrained not only by financial factors but also by non-financial
factors such as lack of training and education, inadequate technical skills, poor access to
markets, lack of information and unreliable infrastructure. Many entrepreneurs rush out to
establish MSEs without having good and adequate technical skills. They covet the
progress and profit of existing ones without good technical background. For this reason,
many enterprises collapse after few years. It is important for entrepreneurs to recognize
the role of education and training in ensuring the success of their business endeavour.
Education and training will help establish a good foundation for small business growth,
(Biggs and Shah, 2006).

2.3.4. Internal factors

Success and failure of MSEs is not only related to external business environment aspect.
It also depends on the firm internal factors and many more key strategic factors, which
can be summarized as follows:
I. Managerial Capacities
Several studies have considered the management capacities of the top management team
as key factors for small business growth. According to Olawale and Garwe (2010),
management capacities are sets of knowledge, skills, and competencies that can make the
small firm more efficient. Aylin (2013) state that management skills are a crucial factor
for the growth of MSEs and that the lack of management skills is a barrier to growth and
is one of the factors that can lead to failure. Pasanan (2007) suggests that the growth
pattern of small firms is associated with their managerial capacities. Bhide (1996) notes
that shortage of core competence and skilled top management team is one of the main
challenges faced by MSEs.

As explained by Kotler (2014), the marketing managers develop the firm's detailed
marketing plans and procedures. With the help of subordinates, including product
development managers and market research managers, they determine the demand for
products and services offered by the firm and its competitors. In addition, they identify
potential markets such as, whole sales, public, retails business firms, or government.
Parker (2014) observes that marketing managers develop pricing strategy with an eye
towards maximizing the firm's share of the market and its profits while ensuring that the
customers are satisfied. In collaboration with sales, product development, and other

21
managers, they monitor trends that indicate the need for new products and services and
oversee product development.

Marketing managers work with advertising and promotion managers to promote the firm's
products and services to attract potential users. Other areas where management is required
may be in promotions, public relations, sales, production and all levels of the
organization. Boulton & Carland (1983), SME is considered to be any organized effort
intended to return a profit or economic outcome through the provision of products or
services to an outside group.

Meredith (2001) observed that the operation of MSEs traditionally requires the investment
of time and capital in creating, expanding or improving the operations of a business. The
enterprises that are considered to have fewer than 250 employees are generally considered
to be MSEs. Management is an essential activity that helps MSEs pursue or achieve their
stated goals Thornton & Kagan (2005).This means that the management measures taken
by any organization are very significant to performance of that organization. Hendrick &
Singhai (2005) argue that management actions and managers activities are very important
in today„s business activities .The actions and dealing done by management in MSEs
decides whether the enterprise performs effectively. McHugh (2010) has given an
example that if a SME is in economic complexity, management ideals of cost cutting may
be expected. Thus, the methods used by management to solve problems will largely
determine the long-term effectiveness of the MSEs (Balfanz&Koelmel, 2009).

In context of this study managing the marketing efficiency is a crucial issue. MSEs must
design and put into action the marketing mix that will best achieve its Objectives in target
markets.
Bouazza (2015) explained that among the major challenges facing the development of
MSEs is the huge lack of technological capabilities, which is the key to developing the
competency of SME owners and managers. Romijn (2001) underlined that technological
capacities are considered as tools for strengthening the competitiveness of MSEs. By
improving their technological capabilities, MSEs can largely improve their production
abilities and profitability: the latter can be improved in several ways, such as through
R&D spending, technology and knowhow agreements with domestic and foreign firms. It
is possible to generalize that Micro and small business owners are in need of at least
training, education and experience sharing with similar industries in order to develop their

22
marketing skill that enable them to with stand challenges coming from marketing
perspectives.
II. Entrepreneurial skill business.
Entrepreneurship is recognized as an important chauffeur of economic growth,
productivity, innovation and employment. Entrepreneurship is related to the functional
role of entrepreneurs and includes coordination, innovation, uncertainty bearing, capital
supply, decision making, ownership and resource allocation in their organization. Most of
the prevailing areas in which MSE faces a problem are sales or marketing, human
resource management, and general marketing research and training ( Iordache, 2014).

The growth of a firm is, to a certain extent, is a matter of decisions made by individual
entrepreneur. This is very much marked for MSEs that are run by owner-managers.
Personality traits, motivation, individual competencies and personal background are
important factors for the success/failure of MSE (Praag, 2003 cited in Munir,2019).

Education helps entrepreneurs to create good judgments, best use of information, exploit
opportunities well leading to firm growth and success Study conducted by Okpara,&
Wynn, (2007 cited in Munir,2019), argue that higher education not only raises enterprise
performance, but also increases external options such as wage employment. Lower
education and vocational training significantly influenced the probability of being
entrepreneurs rather than wage employees.

2.4. The role of micro and small enterprises

As discussed in MUDC (2013), tackling issues of unemployment through the support and
promotion of large scale manufacturing industries has repeatedly failed in countries like
Ethiopia. Large scale enterprises are characterized by larger demand for heavy
machineries with relatively advanced technologies, high investment and working capital,
and more skilled manpower, which are all in limited supply in developing countries. The
growth of MSEs also serves as a link between financial development and poverty
reduction. There is a high correlation between the degree of poverty, unemployment,
economic wellbeing and standard of living of the citizens of these countries, and the
degree of vibrancy of the respective country‟s MSEs. Now a wide-ranging recognition of the
influence of micro and small enterprises to economic growth; recently the role o fMSE in
economic development and employment creation has occupied most of the discussions among
government, policy makers, academicians ,researchers and economist in both developed and
emerging countries. In most fast developing countries MSE by virtue of their size, location,

23
capital investment and their capacity to generate greater employment have proved their powerful
propellant influence for speedy economic growth. The sector is also known as an tool in bringing
about economic transition by effectively using the skill and talent of the people with out
requesting high level training, much investment and sophisticated technology.

The micro and small enterprise sector also described as the national home of entrepreneurship.
They are the primary vehicles by which new entrepreneurs provide the economy with a
continuous supply of ideas, skills, and innovations, Katua,2014. Recent reports released by
ILO and World bank indicated that working in micro, small, and medium enterprises (MSMEs)
is the most prevalent way to make a living in low-and middle-incom countries (ILO,2015;
WorldBank,2013). Formal MSE employ more than one-third of the world‟s labour force
(Kushniretal.,2010).

The International Monetary Fund (IMF) estimates that across the 132 economies covered,
there are about 125 million formal MSE of which 89 million operate Low and Middle
Income Countries (LMICs) and of which the overwhelming majority, about 83%, are
micro enterprises, including the self-employed. Across these countries, micro, and small
enterprises (MSEs) constitute the largest share of private sector enterprises and account
for the majority of employment. Even though large shares of these MSEs are in formal,
they are also accountable for most of the job creation in low and middle income countries.
However, much of the employment in MSEs is low productivity, low income, and low-
quality employment (Reeg, 2015). As a result, substantial controversy remains over the
underlying growth assumptions, the job oilcan regulatory frameworks, and structural and
institutional indiscretions, lack of smooth supply creation potential, and the net
contribution of MSEs to national employment. They face problems of poor raw materials
and lack of working premises, lack of sufficient capital, and marketing problems. These
problems call for government intervention by recognizing and paying due attention to the
promotion and development of MSEs.

It is also important to formulate strategies in a way to address the challenges of

unemployment, economic growth and equity, and overall poverty in the country.
Numerous studies have shown persistence of poverty and the unparalleled level of
unemployment the characterize Ethiopia in general and urban areas in particular. In the
coming years hundreds of millions of new jobs need to be created to keep up with
demographic changes And population growth in low and middle income countries
(LMICs) even to keep unemployment and underemployment rates at their current levels

24
alone to substantially improve the employment situation. The world development report
2013 on „Jobs‟ estimates indicated that there need to an additional 600 million jobs by
2020, if the ratio of employment to working age population is to be held constant (World
Bank, 2013).

Further, evidence suggests that the majority of current jobs in LMICs do not lift people
out of poverty. According to estimates from the International Labour Organization (ILO),
nearly half of all workers worldwide still live below the USD 2 a day poverty line (ILO &
IMF, 2010).Thus, in Job creation within MSEs is defined as the creation of new
employment in existing MSEs as well as the job contributions that arise from new. Order
to reduce poverty, we do not just need more jobs; what we need as well, and more
importantly, are more productive and thus better paying jobs and decent working
conditions (ILO, 2015) However, these estimates are probably only a small part of the
bigger problem as data on micro, small and medium enterprises, in particular on micro
enterprises and the informal sector is scarce and often not comparable across countries
due to differences in definitions and methods of estimation. Most statistical MSE
definitions and subsequent

However, these estimates are probably only a small part of the bigger problem as data on
micro, small and medium enterprises, in particular on micro enterprises and the informal
sector is scarce and often not comparable across countries due to differences in definitions
and methods of estimation. Most statistical MSE definitions and subsequent research are
predominantly concerned with businesses that have formalized or registered in some
manner and have reached a critical number of employees. Consequently, the importance
that micro and small enterprises (MSEs) have in providing employment is often
Underestimated and we know little about their potential in creating jobs.

2.5. Objectives of the national MSE strategy

As indicated in Ethiopia MSE strategy document the primary objective of the national
strategy Frame work is to create an enabling environment for small and micro enterprises.
Given such an Enabling environment, it is expected that hundreds and thousands of MSEs
would themselves be responsible for the operation, growth, and progress of their enterprises.
In addition to this basic objective of the national MSE strategy framework, also related to the
objective of research because of to need understand strategy of national MSE. the following
specifics objectives assumed know. .

25
2.5.1 Facilitate economic growth and bring equitable development
MSEs by making use of pre dominantly local resources engage in the production of goods
and Service some as consumption and stimulate the growth of the economy. The expansion
of MSEs Also contributes towards a more equitable regional development and distribution of
income and wealth.

2.5.2. Creating long-term jobs

While small and micro enterprise activities have absorbed a large number of unemployed
people, they are not always in apposition to generate numerating long- term jobs. Therefore,
support for MSEs has to include skill up grading programs for MSE operators and
strengthening the use of appropriate modern technologies that boost their capacity to create
long-term jobs.

2.5.3. Strengthen cooperation between Mses

There are many constraints that limit the growth of MSEs; the most pressing of which is
shortage of resources. MSEs individually lack the skills and resources to improve their
capabilities. Therefore, it would be very important that the small and fragmented enterprises
with in sectors, regions or other localities being supported to network more effectively in
order to jointly address hindering obstacles, take up opportunities, and build collective
efficiency. In addition to this, inter-sectorial linkage would also be crucial for their
development.

2.5.4. Provide the basis for medium and large scale enterprises
MSEs provide these bed for grow than stimulate in digamous entrepreneurship. They provide
training for entrepreneurs and managers and through this learning process, MSEs grow in to
medium and large ones.

2.5.5. Export promotion

The strategy will also focus on designing and developing mechanisms that will help MSEs
participate in export market specially in leather and leather products, textiles, horticulture,
etc. in which the country has comparative advantages.

2.5.6. Balance preferential treatment between MSEs. and bigger enterprises

The support strategy will help to correct the preferential treatment accorded in favour of
bigger enterprises. At the same time, it aims at bringing the greatest possible cooperation and
interaction between the segments (Micro, Small, Medium, and Large) of the economy.

26
2.5.7. MSE support service provided by city government of Addis Ababa MSE
The promotion of MSEs is one of the strategic direction spurs used by the City Government
of Addis Ababa Micro and Small Enterprise Development Agency during the GTP I
implementation period(2010/11-2014/15),the agency focused on promoting the development
and competitiveness of MSEs by providing different supports. Accordingly, the following
core support has been planned first the strategy backs to create and implement an enabling
legal framework. Second, it envisages establishing user friendly business environment, for
example, by simplifying and standardizing registration, licensing, and other enterprise
development services. Finally, the agency offers direct policy support by devising targeted
and specific support programs such as access to finance, access to appropriate training and
technology, marketing linkage, provision of physical infrastructures and access to working
and selling spaces and other hand holding supports as deemed appropriate.

2.6. Conceptual framework of this research

As evidently stated in European Bank Micro, Small and Medium Enterprises
strategyDocument long-term sustainable economic growth and job creation will only be
achieved through the existence of a vibrant entrepreneurial sector. Active promotion of
this sector is both a means and anend to the transition to markete conomy and the creation of
an entrepreneurial class will both mitigate the social costs associated with restructuring
enterprises and enhance the likelihood of a durable commitment to democratic societies and
the rule of law.

In this contemporary world, the promotion of MSEs is therefore at the heart of development
of both developed and developing countries (MSMES strategy, European Bank, 2006)).
Thus, policy dialogue work is intended to focus on improving the business climate for MSEs
generally, with a priority on addressing policies and regulation which create impediments to
accessing and providing financing, working infrastructure and business development support
service, This can take many forms ranging from ad hoc interaction with local government
bodies and workout developing short term and long term policy dialogue with the respective
institutions working on this specific sector.

In Ethiopia‟s stated in the government MSE strategy document although there have been
attempts by the government to liberalize and improve the policy, regulatory and institutional
support environment for MSEs, which resulted in increase in investment and competition and
improvement in the licensing procedures, the real practice as evidence by different research

27
 indicates that there is divergence between stated policies & directives and the outcome on the
ground. Capital shortage, inadequate business premise, inadequate/uncertain market and high
taxes remain major constraints to expand MSEs(Gebrehwiot and Wolday,2006).

To sum up, studying MSE dynamics has led to the insight that there is no single factor, but
rather a number of factors policy, financial and operational factors within the MSE owner‟s
drives enterprise growth, sustainability.As specified above, in different segment of the
literature review the researcher want to summarize that existence of favourable MSE
development policy with access to finance, access to working premises, Well established
infrastructure, in support of appropriate business development service, innovation,
entrepreneurship, managerial, technical and skills will enhance performances of MSE
enterprise only when the support is integrated and collectively provided for the enterprise
based on their real need and challenges they encountered

Contextual factors Politico-legal factors

factors Working premises

Technological factors

Infrastructural factors Performance of

MSEs
Marketing factors
(Profitability)
Financial factors

Management factors

Internal factors Entrepreneurial factors

Figure 2-1: conceptualframework of the study

28
 CHAPTER THREE: RESEARCH METHODOLOGY

3.0 Introduction
In order to analyse the potential impacts of factors on performance of MSEs, this study will
be made use of a research methodology. This section provides an overview of the study‟s
research approach which lays within the mixed methods strategies. The chapter discusses
procedures and activities under taken, focusing on namely the study‟s research design,
questionnaire design, data collection, sampling strategy, data processing and analysis and
instrument development. Besides, the section deals with a discussion on the ethical issues and
the study area profile.

3.1 Description of Study Area

Dessie is a city found in north-central Ethiopia Amhara region South Wollo zone in the north
from Addis Ababa distance of 401 km, in the east from Bahir Dar distance 480 km and also
the seat of south wollo zone that pointed at latitude of 1102.6' to 11017.2' N and longitude of
390 33.6' to 39043.3' E, Elevation between 1922 m and 3041 meter above sea level (masl)and
also received 1100 milli-meters average annual rainfall. Dessie established in 1893 by King
Michael. The city serves as social, economic and political centre for the south wollo zone and
their administration. The city has 5 sub cities and 26 kebeles (18 in urban and 8 in rural).Out
of the 18 in urban kebelese in Dessie city administration, the researcher will take three sub
city namely segno gbya, Arada, and bwanebwha sub city since alarge number of MSEs are
found and high concentration area in the selected s u b cities. samples also will be focused on
Construction ,Manufacturing And urban agriculture sectors would be used sine most of the
enterprises found in the city are of these forms.

Figure 3-1: Location map of study area

29
3.2 Research Approach
According to Mark et al. (2009:101) mixing qualitative and quantitative approaches gives the
potential to cover each method‟s weaknesses with strengths from the other method. In this
study, a combination of qualitative and quantitative approaches of doing research will be
employed, which has been practiced, as recommended by Creswell (2009:203-216).

3.3 Research Design

The types of research will be employed under this study is descriptive and explanatory
research. The major purpose of descriptive research is description of the state of affairs as it
exists at present. Then this study describes and critically assesses the factors affecting the
performance of MSEs in three sub-cities of Dessie. Second, the study will employs
explanatory in that the relationship between variables is correlated with an aim of estimating
the integrated influence of the factors on performance.
Moreover, the study will be utilized cross-sectional in the sense that all relevant data will be
collected at a single point in time. The reason for preferring a cross-sectional study is due to
the vast nature of the study and the limitation of time. And obtaining information from a
cross-section of a population at a single point in time is a reasonable strategy for pursuing
many descriptive researches (Janet M. Ruane, 2006:94).

3.4 Data Sources

The study will employ both primary and secondary data sources in order to obtain more
reliable data. Both primary and secondary data will be employed for the reason that they will
increase the depth and breadth of the data.
Primary data will be collected with questionnaires from sampled respondents of the
Population and Interview results.
The secondary data will be collected from journals, articles, newspapers and research papers
written about Growth cycles performances in general and growth cycles in Dessie city in
particular.
3.5. Population, Sample Size and Sampling Technique
3.5.1. Target Population of the study
The total Target population of this study will be about 620 registered MSEs in Senogebaya,
Arada, bwanboweha Sub City in Dessie city Administration on three different sectors:
Manufacturing, Construction, agriculture providers.

30
Table 3-1: Total Target population of the study

No MSEs by Sectors Number of MSEs Rema

rk

Seghnoge Arada Bonebowa Total

wuaha
1 Manufacturing 57 64 103 224
2 Urban -Agriculture 135 26 96 257
3 Construction 40 36 63 139
Total 232 126 262 620
Source:Researcher‟scalculation

3.5.2. Sampling Strategy and Procedures

The study used multi-stage probability sampling techniques. In the first stage selection of this
study, the Seghnoge Arada and Bonebowawuaha sub-cities are purposely chosen among
the 5 sub-cities of Dessie, as a study area for this research. This is because it is claimed by the
government of Ethiopia, that the MSE sector is a prime strategy to economic development in
urban areas..
Although there are different sectors in which the MSE operators have been engaged in
Seghnoge Arada and Bonebowawuaha sub-cities, the sectors will be selected for this
research is Manufacturing, Urban -Agriculture and Construction sector because of the
following rationales. First, the sectors will be selected because of largest concentration in
number compared to other sectors in the sub-cities. This will make the sector more and easily
accessible for the data collection. Second, it is difficult to reach the operators/or owners
managers of some sectors like municipality service, parking and others. Lastly,
manufacturing and construction „popularity‟ in Ethiopia by absorbing significant number of
operators via cooperative form of organization is also shown empirically by Meheret and
Tegegne (2010:36-37).

3.5.3 Sampling Technique

Stratified random sampling will be used to get information from different sizes of the MSEs.
This technique is will be preferred because it is use to assist in minimizing bias when dealing
with the population. With this technique, the sampling frame will be organized into relatively
homogeneous groups (strata) before selecting elements for the sample.

31
According to Janet (2006:94), this step increases the probability that the final sample will be
representative in terms of the stratified groups. The strata‟s are sectors including:
Manufacturing, Urban -Agriculture and Construction sector

According to Catherine Dawson (2009:54), 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 list of the population formally registered MSEs until December 2014 by the
Dessie City Administration Trade and Industry Development zone will be obtained. The total
population of the study is 620 enterprises which includes Manufacturing, (224), Urban -
Agriculture (257) and Construction (139). The sample size will be selected here is considered
as representative of Manufacturing, Urban -Agriculture and Construction sector and also
large enough to allow for precision, confidence and general ability of the research findings.
The following formula will used for the calculation of the sample size since it is relevant to
studies where a probability sampling method will be used (Watson, 2001:5).
( )
( )

⌊ ⌋

Where, n = sample size required = 243

N = number of population = 620
P = estimated variance in the population = 50%
A = margin of error = 5%
Z = confidence level = 1.96 for 95% confidence
R = estimated response rate = 96%
Accordingly, 243 respondents will be selected from the total of 620 MSEs. These 243
respondents will be selected from Manufacturing, Urban -Agriculture and Construction sector
on proportional basis. Therefore, [(224/620) x 243] = 87 Manufacturing, out of 224,
[(257/620) x 243] =101 Urban -Agriculture out of 257 and [(139/620) x 243] =55
Construction out of 139 will be selected. The interviews will be administered on the sample
of 4 operators out of 620. This small number of interviewee will be selected because of
related responses from majority of respondents.

32
 Table 3-2 : Sample size selections under each stratum

No Sector Population size under each stratum %

Seghnogebeya Arada Bonebwaha Total
1 Manufacturing 22 25 40 87 36
2 Urban -Agriculture 53 10 38 101 41
3 Construction 16 14 25 55 23
Total 91 49 103 243 10
Source:Researcher‟scalculation

3.6. Data Collection Methods

Primary and secondary data will be adopted to achieve the objective of the study. The
primary data collected through questionnaires. The layout of the questionnaire will be kept
very simple to encourage meaningful participation by the respondents. The questions were
kept as concise as possible with care taken to the actual wording and phrasing of the
questions. The reason for the appearance and layout of the questionnaire are of great
importance in any survey where the questionnaire is to be completed by the respondent (John
A. et al., 2007:128-42). The literature in the study will be used as a guideline for the
development of the questions in the questionnaire. Besides, some questions in the
questionnaire will be adopted from other sources (Habtamu, n.d.:72-75 and Mulugeta,
2010:74-79). The questions that will be used in the questionnaire are multiple-choice
questions and five-point likert scale type questions. The type of scales will be used to
measure the items on the instrument is continuous scales (strongly agree to strongly
disagree). For the sake of, secondary data, the research will be employed various literature
information and company document

3.7 VARIABLES AND MEASUREMENTS

The selection of performance measures that reflect the true situation of small businesses with
some degree of certainty and reliability is indeed a crucial process (Rami and Ahmed,
2007:6). The lack of universally accepted standard performance measures left the door open
to business organizations to decide and choose its own performance measures that might not
truly reflect their performance. Such performance measures include but not limited to: market
share, sales volume, company reputation, return-on-investment (ROI), profitability, and
established corporate identity. While some might argue that most of these performance
measures are appropriate for large corporations, they are not always perfectly applicable to
small businesses.

33
In this study, change in profit is used as a dependent variable to measure the performance of
MSEs. Here the change in profit ratio data is used as the measure of the dependent variable
performance of the enterprises involved in the survey. This is mainly because of the
following three reasons. First, as the pilot study clearly indicates, MSEs are more focuses on
profitability than other modes of performance measures. Second, as recommended by Rami
and Ahmed (2007:6) change in profit has been widely adopted by most researchers and
practitioners in business performance models. Also growth in employment level of the
enterprises would not be another appropriate alternative measure of performance because this
MSEs are primarily established as a source of self-employment. The independent variables
are politico-legal, working premises, technological, infrastructural, marketing, financial,
management and entrepreneurial variables.

3.8 Method of Data Analysis

This is the further transformation of the processed data to look for patterns and relationship
between and/or among data groups by using descriptive and inferential (statistical) analysis.
The Statistical Package for Social Science (SPSS) version 23will be used to analyse the data
obtained from primary sources. Specifically, descriptive statistics (mean, standard deviation
and charts) and inferential statistics (correlation and regression) will be taken from this tool.

3.8.1 Descriptive Analysis

Descriptive analysis will be used to reduce the data in to a summary format by tabulation
(the data arranged in a table format) and measure of central tendency (mean and standard
deviation) and measure of central tendency (mean and standard deviation). Moreover, pie
charts will be used to describe the general characteristics of enterprises. The reason for using
descriptive statistics is to compare the different factors. Besides, the interview questions will
be analysed using descriptive narrations through concurrent triangulation strategy.

3.8.2 Inferential Analysis

According to Sekaran (2000:401), inferential statistics allows to infer from the data through
analysis the relationship between two or more variables and how several independent
variables might explain the variance in a dependent variable. The following inferential
statistical methods will be used in this study.

3.8.2.1 The Pearson Product Moment Correlation Coefficient

According to Phyllis and his associates (2007:18-55), inferences have a very important in
management research. This is so because conclusions are normally established on the bases
34
of results. Such generalizations are therefore, be made for the population from the samples.
They speculate that the Pearson Product Moment Correlation Coefficient is a widely used
statistical method for obtaining an index of the relationships between two variables when the
relationships between the variables is linear and when the two variables correlation are
continuous. To ascertain whether a statistically significant relationship exists between
politico-legal, working premises, technology, infrastructure, marketing, finance, management
and entrepreneurial factors with firm‟s performance, the Product Moment Correlation
Coefficient will be used.
According to Duncan C. and Dennis H. (2004:38-41), correlation coefficient can range from -
1 to +1. The value of -1 represents a perfect negative correlation while a value of +1
represents a perfect positive correlation. A value of 0 correlations represents no relationship.
The results of correlation coefficient may be interpreted as follows.
Correlation coefficient Interpretation
(-1.00 to -0.8] Strong
(-0.8 to -0.6] Substantial Negative
(-0.6 to -0.4] Medium
(-0.4 to -0.2] Low
(-0.2 to 0.2) Very Low
[0.2 to 0.4) Low
[0.4 to 0.6) Medium Positive
[0.6 to 0.8) Substantial
[0.8 to 1.00) Strong

In this study Pearson‟s Product Moment Correlation Coefficient will be used to determine the
following relationships.
 The relationship between politico-legal factors and performance of MSEs;
 The relationship between working premises factors and performance of MSEs;
 The relationship between technology factors and performance of MSEs;
 The relationship between infrastructural factors and performance of MSEs;
 The relationship between marketing factors and performance of MSEs;
 The relationship between financial factors and performance of MSEs;
 The relationship between management factors and performance of MSEs;
 The relationship between entrepreneurial factors and performance of MSEs;

35
3.8.2.2 Linear Regression Analysis
Linear regression is a method of estimating or predicting a value on some dependent variable
given the values of one or more independent variables. Like correlations, statistical regression
examines the association or relationship between variables. Unlike correlations, however, the
primary purpose of regression is prediction (Geoffrey M. et al., 2005:224-225). In this study
multiple regressions will be employed. Multiple regression analysis takes into account the
inter-correlations among all variables will be involved. This method also takes into account
the correlations among the predictor scores (John Adams, et al., 2007:198). They added
multiple regression analysis, which means more than one predictor is jointly regressed
against the criterion variable. This method is used to determine if the independent variables
will explain the variance in dependent variable.
Regression Functions
The equation of regressions on this study is generally built around two sets of variables,
namely dependent variable (Business performance) and independent variables (politico-legal,
working premises, technology, infrastructure, marketing, finance, management and
entrepreneurial). The basic objective of using regression equation on this study is to make the
study more effective at describing, understanding and predicting the stated variables.
Regress Performance on Selected Variables
= + + + + + + + +
Where: Y is the response or dependent variable- performance
= politico-legal, = working premises, = technology, = infrastructure, =
marketing, = finance, = management and = entrepreneurial skills are the explanatory
variables.
Is the intercept term- constant which would be equal to the mean if all slope coefficients
are 0.
, , , , , , , and are the coefficients associated with each independent
variable which measures the change in the mean value of Y, per unit change in their
respective independent variables.
Accordingly, this statistical technique will be used to explain the following relationships.
Regress performance (as dependent variable) on the selected linear combination of the
independent variables using multiple regressions

36
3.9 INSTRUMENT DEVELOPMENT
Basically, the instruments will be developed based on the objectives of the study and research
questions. The principles of questionnaires such as, use simple and clear languages,
statements should not be too long and use of appropriate punctuations will be also considered
when developing the instrument. In addition, interviews will be taken as an instrument to
strength the investigation.

3.9.1 Design of the Instruments

The instruments will be designed in such ways that can strength the viability of the study.
The questionnaires will be designed both in English and Amharic languages. The purpose of
translating from English to Amharic language is to utilize those who cannot clearly
understand English language so that respond easily. The interview questions will be designed
in English language only, because the discussion was in Amharic while making interviews
with operators.

3.9.2 Instrument Validity

Validity is the degree to which a test measures what it purports to measure (Creswell,
2009:190-92). Validity defined as the accuracy and meaningfulness of the inferences which
are based on the research results. It is the degree to which results will be obtained from the
analysis of the data actually represents the phenomena under study. He contends that the
validity of the questionnaire data depends on a crucial way the ability and willingness of the
respondents to provide the information requested.

A pilot study will be conducted to refine the methodology and test instrument such as a
questionnaire before administering the final phase. Questionnaires will be tested on potential
respondents to make the data collecting instruments objective, relevant, suitable to the
problem and reliable as recommended by John Adams et al. (2007:136). Issues raised by
respondents will be corrected and questionnaires will be refined. Besides, proper detection by
an advisor will be also taken to ensure validity of the instruments. Finally, the improved
version of the questionnaires will be printed, duplicated and dispatched.

The instruments will be selected can help to show factors that affect performance of MSEs. It
can clearly address how these factors affect the performance of MSEs in three sub-cities. The
relevant data will be collected on the factors of the MSEs that can better indicate the
relationship between factors and the performance of MSEs. The structured and unstructured

37
interviews can also validate the measurement. Moreover, to have valid conclusion, inferential
statistical model will be used to test the relationship between the variables.

3.9.3 Instrument Reliability

The reliability of instruments measures the consistency of instruments. Creswell (2009:190-
92) considers the reliability of the instruments as the degree of consistency that the
instruments or procedure demonstrates. The reliability of a standardized test is usually
expressed as a correlation coefficient, which measures the strength of association between
variables. Such coefficients vary between -1.00 and +1.00 with the former showing that there
is a perfect negative reliability and the latter shows that there is perfect positive reliability.

In this study each statement will be rated on a 5 point likert response scale which includes
strongly agree, agree, undecided, disagree and strongly disagree. Based on this an internal
consistency reliability test will be conducted in the Seghnogebeya, Arada and Bowanbwauha
sub-cities with a sample of 21 operators and the Cronbach's alpha coefficient for the
instrument is found as 0.802 which is highly reliable. Typically an alpha value of 0.80 or
higher is taken as a good indication of reliability, although others suggest that it is acceptable
if it is 0.67 or above (Cohen et al., 2007:506). Since, instruments will be developed based on
research questions and objectives; it is possible to collect necessary data from respondents.
Then, instruments are consistent with the objectives of the study.

3.10 ETHICAL CONSIDERATIONS

All the research participants included in this study will be appropriately informed about the
purpose of the research and their willingness and consent will be secured before the
commencement of distributing questionnaire and asking interview questions. Although all
interview sessions will be tried to tape-record, it will impossible as the respondents were not
voluntary. Regarding the right to privacy of the respondents, the study will be maintained the
confidentiality of the identity of each participant. In all cases, names will be kept confidential
thus collective names like „respondents‟ will be used.

38
 WORK PLAN
This contains the schedule or plan of time that is required to accomplish the research. The
details will be presented as follows.

S.N Expected Activities to be done by the respective advisees Schedule deadline

1 Synopsis preparation and submission February 12-30.2014 E.C

2 Proposal preparation and submission(usually chapter -1&3) Up to march 2.2014E.C

3 Developing Introduction ,including motivation ,/rationale, problem Up to march 8. 2014 E.C
statement, objectives/,research question, significance, scope,
operational definition(chapter -1)
4 Undertaking intensive Relevant Review of Literature( chapter -2) Up to march 30. 2014E.C
5 Preparing sound Methodology including tool development( Up to march 10. 2014E.C
chapter -3)
6 Undertaking Data Collection Up to march 30. 2014 E.C
7 Result submission ( chapter -4) UP to April 10.2012 E.C
8 Undertaking Discussion ,Considering critical reflections on thesis Up to April 30. 2014 E.C
strengths and limitations, and future directions( chapter-5)
9 Writing Summary, Conclusion, and Recommendation/ Up to May 30. 2014 E.C
implications( chapter-6)
10 First draft thesis submission to the advisor UP to June 30. 2014E.C
11 Final revised thesis submission to the advisor UP to July 30. 2014E.C

BUDGET
These sources cost will cover by the researcher. It is a monetary cost that will be incurred in
order to accomplish the research. The details are presented below.

No. Specification Number/Units Single Total

Cost Price
1 Data and information cost (including 1000 minutes 0.35 350
telephone, internet) in Birr
2 Transportation cost 500 k.m 1 500.00
3 Secretarial cost 200 sheet 3 600.00
4 Stationary 5 packet sheet 400 2000.00
5 Hard copy development 3 400 1200.00
6 Contingency 1000.00

39
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