FACTORS THAT DETERMINE PROFITABILITY OF MICRO AND SMALL SCALE ENTERPRISE IN TARMABER WOREDA, NORTHE SHEWAAMHARA REGIONAL STATE

Abstract

The aim of this research was investigate factors affecting the profitability of MSEs with a special emphasizes on manufacturing, construction, urban agriculture and service sectors in Tarmaber woreda of North Shewa Zone. For the sake of achieving the objectives of this study, questionnaires were analysed using statistical analysis such as descriptive and inferential analyses. The information gleaned through questionnaire from a sample of 78 operators and face-to-face interviews were collected with18MSEsOperators. The respondent was selected using stratified sampling technique. Besides, the interview questions were analyzed using descriptive narrations through concurrent triangulation strategy. The empirical study elicited eight major challenges which seem to affect profitability of MSEs in woreda which include: inadequate recordkeeping, lack of working place factor, marketing problems, inadequate infrastructures, poor management practices, and political, and financialproblems including bureaucratic bottlenecks system. The findings further indicate that, there exists linear and positive significant ranging from substantial to strong relationship was found between independent variables and dependent variable. Moreover, the selected independent variables may significantly explain the variations in the dependent variable at 1% level of significance. Based on findings, recommendations to government bodies, to operators of MSEs and suggestions for other researchers are forwarded