Determinants for the Growth of Small and Medium Enterprises in Ethiopia: A Case of Derash Woreda, Gidole Town, Southern Ethiopia

Abstract

This study aims to identify the determinants for the growth of Small and medium enterprises (SMEs) in Derash Woreda, Gidole Town. To achieve the “general and specific objectives”, this study was investigated external and internal factors affecting the growth of SMEs. This study was used a descriptive research design and a quantitative research approach. The primary data sources were collected from SMEs engaged in service, manufacturing, trade, construction, and urban agriculture. The sampling techniques used for this study are the stratified sampling technique. However, the sample size used for this study is 50 SMEs. For data analysis, multiple linear regression models were used. The finding for this study indicated that the external factors such as education, training, experience, and social network are positively or significant relationship with the growth of SMEs; on the other hand, the internal factors such as management capacity, marketing skill, accounting record-keeping, firm age and firm size are positively or significant relationship with the growth of SMEs. Hence, to increase the growth of SMEs, it is suggested that SMEs stockholders, SMEs owners, and government bodies improve the knowledge and awareness of SMEs related to external and internal factors. The concerned bodies to solve the problem provide access to finance, technology, skilled workforce, marketing and business communication and facilitating necessary infrastructure.