FACTORS INFLUENCING PROFITABILITY OF MICRO AND SMALL SCALE ENTERPRISES IN ADDIS ABABA: IN THE CASE LEATHER PRODUCTS MANUFACTURING

Abstract

Micro and Small (MSSEs) play an important economic role in many countries. In Ethiopia, for example the MSSE sector contributes over 50 percent of new jobs created but despite their significance. The purpose of this study will be to explain in detail factors influencing on the profitability of Micro and Small scales leather products manufacturing Enterprises in Arada, Gulele, and Yeka sub-city Addis Ababa City Administration, Ethiopia. The study uses explanatory research design. The study targeted Leather Manufacturing MSSEs that were based in Addis Ababa, Ethiopia. Census was usd for sample determining strategy because the total population is small, primary data was collected from the study respondents using survey and questionnaires which was self-administered and others researcher administering. Data was analyzed descriptively and presenting through figures, tables, percentages. When doing regression analysis we determine whether or not there is a relationship between the independent variable and the dependent variable by examining the significance of the regression F statistic for the regression analysis less than the level of significance of 0.05. We reject the null hypothesis because there is positively and significantly strong relationship between the independent the capital and the dependent variable of profitability. Generally, in order to increase the profitability of leather products manufacturing in MSSEs level should need more attention. Also enterprises should improve managing time, money, decrease material wastage I recommended that firms have to improve their financial status, and technological capability on their side. On the other hand, the government has to support them by giving special incentives that promote the manufacturing industry in terms of financial accessibility, promotional support and acess of raw materials easily with comfortabl price for enterprises.