Effects of Training and Business Development Service on Micro and Small Enterprises Performance

Henok Laike¹ and Belay Mengstie^2*

1. Business development and innovation manager, EDI, Ethiopia.

2. Assistant professor in management, Woldia University; United Nation Conference for Trade and Development (UNCTAD) National trainer, Ethiopian Entrepreneurship Development Institute.

Received: 02 February, 2024; Accepted: 21 March, 2024; Published: 25 March, 2024

Citation: Henok, Laike and Mengstie B. “Effects of Training and Business Development Service on Micro and Small Enterprises Performance.” J Glob Entrep Manage (2024): 108. DOI: 10.59462/JGEM.2.1.108

Copyright: © 2023 Dr. Belay Mengstie. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution and reproduction in any medium, provided the original author and source are credited

Keywords

Behavior-Based • Entrepreneurship • Business Development Services • Business Growth • Business Performance • MSMEs

Introduction

Beginning from pre-modernization and contemporary economies era up to the state of industrial revolution and modern economies, many nations have recognized the relevance of promoting the development of entrepreneurship and MSMEs to tackle their multifaceted socio-economic challenges such as unemployment, passive economic growth and rapid urbanization [1-3]. In developing economies like Ethiopia, the aforementioned challenges have been particularly intense due to absence of a vibrant private sector to drive the economy, accelerated rural-urban migration and the existence of a small employment market to accommodate the growing population visà- vis the very large number of job seekers graduating from higher educational institutions every year [4].

On the contrary, MSMEs in developing countries like Ethiopia encounter several hurdles that prevents them from realizing their full growth and sustainability potentials. These barriers most often fall under an internal or external factor affecting their operations. Some of the internal factors include lack of sufficient entrepreneurial skill or lack of know-how of running and operating a business, lack of proper understanding of the business context/environment, lack of motivation, calculated risk taking or business readiness etc. Some of the external factors include inadequate finance/access to loan, lack of raw materials, inadequate infrastructures, stiff market competitions, cumbersome legal and regulatory environments, TAX issues, FOREX etc [2, 5, 6]. Another recent challenge for MSMEs and the private sector in general has been the Covid-19 pandemic which according to a study conducted by ITC (2020) in 132 countries revealed that the pandemic significantly affected two-thirds of MSME’s operation and one-fifth face risks of shutting down permanently.

In line with the emphasis given for entrepreneurship development as part of the EDP, another critical success factor for realizing MSMEs growth and performance had been found to be the delivery of an end-to-end BDS support services that encompasses the fullfledged package provided to MSMEs to enable them alleviate both their internal and external challenges they face on a daily basis. Delivery of BDS is basically a guarantee to make sure MSME’s survive amidst these challenges and endure in the volatile business environment that exists in the country as it also plays a vital role in obtaining a positive performance in their operations for growth, expansion and sustainability.

This thesis envisages to quantitatively investigating the effects of the internationally recognized behavioralbased entrepreneurship-training program and the follow up business development services on the performance and growth of MSMEs that have accessed program interventions as part of the EDP from EDC Ethiopia. It also examines the direct and indirect relationships that exists between entrepreneurship trainings, BDS services and their effect on business performance and growth. The output of this research will be instrumental for the organization enabling it to witness the intermediate level outcomes of its major program interventions on program beneficiaries which will be used as an evidence for program rationale, an input for similar program development especially for donors, as justifications for reports and documentations and as a tool for implementation and strategy formulation. The research also indicates key areas of improvement to further strengthen the implementation of the EDP across Ethiopia with respect to entrepreneurship and BDS program interventions.

Problem Statement

Entrepreneurship trainings and BDS supports have been proven to be pivotal in enabling either a naturally born aspiring entrepreneur or individuals with no prior entrepreneurial traits to become entrepreneurs, create their own ventures and shape its growth and sustainability. The role of entrepreneurship on jobs and economic growth is also highlighted in several researches [7,8]. MSMEs are considered backbone of an economy to bring sustainable growth, employment, development of entrepreneurial skills and contribution to GDP growth [9].

Starting from its establishment in 2013, EDC Ethiopia has been delivering UNCTAD’s behavioral-based entrepreneurship training program to its clients commonly known as EMPERTEC and a tailored follow up BDS for selected growth-oriented enterprises and startups with an aim to support them in their journey to keep their enterprises on the right path for growth and sustainability. As part of the EDP, to date EDC Ethiopia has trained more than 120,000 aspiring women/youth entrepreneurs and startups and provided BDS to more than 16,000 enterprises. Based on the latest annual report of the program in 2021, EDC Ethiopia has been able to contribute for the creation of more than 13,000 enterprises, for expansion of more than 12,000 enterprises and for the formalization of more than 10,000 enterprises. Similarly, based on the programme evaluation reports of the EDP I and EDP II programs, clients of EDC demonstrated a positive change on their know-how on business, entrepreneurial skills and business performance [10].

Even though there exist related studies to investigate effect of entrepreneurship training programs and BDS on business performance and growth, these studies basically differ from the nature of this research’s main focus which is on an organizational-level program involving a mix of behavior-based entrepreneurship training and an integrated BDS support. In the case of EDC Ethiopia, there has been no such studies conducted to specifically investigate the effect of the two pillar programs at an organization-level and by not having such type of studies it will be difficult to trace out major underlying factors under the two programs that play a role in performance of MSMEs other than the general monitoring and evaluation procedures in place to track project implementation progress. Hence, this thesis is aimed at filling this specific gap by conducting a deeper investigation on the effect of EDC’s main program packages on client’s enterprises performance to determine actual factors that leads to enterprise growth and business performance as a result of the mix of program interventions. Specifically, this research attempts to answer the following research questions:

2. What are the critical factors in EDC Ethiopia’s program interventions that contribute significantly to the growth and performance of MSMEs that have gained access to services?

Objectives

• To explore the nature of EDC Ethiopia’s behavioralbased entrepreneurship programs and BDS support packages provided to clients.

• To assess critical success factors in EDC Ethiopia’s training and BDS program interventions.

• To discover if there are any programmatic or strategic relationships among the EMPERTEC training and BDS programs that contribute to its effectiveness.

• To put forth recommendations that will further enhance the delivery and the effectiveness of program interventions.

Literature Review

Entrepreneurship and its impact on economy

Nelson and Pack [11] discuss how traditional economic models put capital investment, labor and technology as sufficient parameters for economic growth however new models of economic growth put entrepreneurship/ innovation as a necessary complement for economic growth. Even some studies put entrepreneurship as the fourth production factor in the macroeconomic production function. By exploring a sample data of 36 countries categorized as low-income, transition and high-income and by employing a scientific quantitative analysis considering YB index, GDP, per capita income (GNIC) and Growth Competitiveness Index (GCI), Eric and Andre suggest that entrepreneurship does not have an effect on economic growth in low income countries rather it contributes strongly to the macroeconomic growth in transition and high-income countries.

Drucker [12] states that, it is as a result of entrepreneurs and entrepreneurial activities that the world has been able to evolve after repeated devastations such as world war I & II and economic recessions. It is their ideas, savings, investments and innovations that continually serves to alleviate poverty, contribute to economic growth and job creation. According to Rauch [13], entrepreneurship has long been considered a crucial mechanism of economic development however empirical studies about its direct role seem to show mixed evidences i.e. heterogeneity on the micro and macro level is observed in the kind of entrepreneurship and the kind of economic context which determines the extent of its effect on an economy. Hence, some critical questions need to be asked here such as “What kind of entrepreneurship are most crucial for economic growth?” and “How does the role of entrepreneurship differ between high income, transition and low income countries?”.

Most literatures in the 19th century and early 20th century including renowned economists like Shumpeter clearly indicated a strong linkage between entrepreneurship and economic growth indicating relationships such as entrepreneurship holds competitive behaviors that drive market process; entrepreneurship contributes to economic performance by introducing innovations, creating change, creating competition and enhancing rivalry; entrepreneurship is crucial to long-term economic growth leveraging entrepreneurs behavior as change agents to bring new ideas to market and stimulate growth through a process of competitive firm selection [14].

BDS and its impact on MSMEs

BDS is one of the critical factors that affects performance and growth of MSMEs which includes both non-financial and financial services that enables MSME operators to thrive in a competitive domestic and global market [15]. Nussabaum and Miehlbradt [16] defines BDS as any non-financial service provided to businesses on either a formal or informal basis. According to OECD, Olami [17], MSMEs are able to realize their full potential and ensure sustainability if they are provided with relevant BDS to enhance and promote their performance and growth. The main intention of BDS is to provide wide range of services to enterprises at any level so that they could be operated efficiently and their growth is realized. BDS are basically designed to enable MSMEs overcome barriers so that they could increase their profitability by improving their productivity through access of high value markets [16].

Major BDS interventions include but not limited to business consultancy services including advisory services on business strategies, assistance with market access, input supply, technology development and transfer, training and technical assistance including both soft and hard skill, provision of business infrastructure, professional services such as legal or ICT services and policy advocacy services [18].

According to Ageba and Amha [5] and Pinto [18], there are majorly two approaches of BDS delivery strategies: traditional and market development approaches where the newly developed market development approach was deemed to be more effective than the traditional approach as it is entirely demand-driven that focuses on the market assessing demand, supply and potential. However, as the number of BDS providers both public and private are very limited in the country when compared to the demand this issue is also considered as a constraint for MSMEs growth. Although a handful of literatures indicate positive findings regarding advisory services that focuses on provision of technical assistance, the study conducted by the World Bank on 104 SMEs whose projects have been financed, indicated that 65% were unsuccessful even though there were underlying causes such as changing market conditions, financial crises and change in SMEs priorities. On the other hand, the same study found that a wide range of well-designed BDS interventions showed a positive result among the SMEs [19].

According to the meta-analysis study conducted by Cravo and Piza [20] which explored 42 studies from 2003 to 2014 to investigate the impact of business support services on firms performance, support services can be classified as direct and indirect. Direct interventions include delivering direct support services to the SMEs themselves in the areas of training, boosting productivity, innovation and growth whereas indirect interventions deal with availing financial resources, credit and creating a conducive policy and regulatory framework for SMEs operation. The final outcomes of the study clearly showed that the direct and indirect support services delivered for SMEs were found to be instrumental in obtaining higher revenues & profits, higher productivity and employment generation among SMEs.

Determinants of MSMEs perform-ance

MSME performance can be determined by several factors that precisely reflect the nature and trends of the domestic, international, sectoral and enterpriselevel factors [21]. SME performance can be viewed from a static or dynamic perspective. Dynamically, a stochastic growth model is used. In this regard, analysts will consider the performance of a particular SME over the long term [22]. Performance of MSMEs can be influenced by diversified parameters such as availability of materials and inputs, access to training and capacity building, access to BDS, access to credit, type of business, utilization of ICT, infrastructure availability, marketing and marketing services, management skills of employees, working environment, entrepreneurial culture, cost of doing business, fairness of customer service and production of standard and quality products as cited by [23].

According to various literatures cited by Emanuel et al there are three school of thoughts that indicate business performances which are market structure (includes market concentration, firm age, size, foreign ownership, capital, competition etc), efficient management of human and material resources (includes innovation, research and development etc) and business environment.

According to Okafor [24], another perspective of determinants of business performance are classified in two aspects of hypotheses which are efficient structure, and structure conduct performance & business environment factors. Efficiency structure factors include training, experiences, human capital, innovation, research and development whereas structure conduct performance factors include foreign ownership, entry barriers, firm age, size and capital. Business environment factors includes impact of conflict, corruption, poor infrastructure, policy and regulatory environments.

Research gap

The theoretical and empirical reviews in this section clearly indicated an existence of impacts generated by entrepreneurship training programs and BDS services in various sectors as well as different measurement parameters that signals an effect on performance of enterprises in general. The main gaps that initiated this research and the aspects in which this research differs from other similar types of studies conducted in the sector are elaborated as follows. First, this research aims to investigate the intermediate-level effect of both entrepreneurship specifically the behavioralbased training program and BDS on firm’s growth and performance owned and operated by clients’ of EDC Ethiopia. Second, the firms included range from microlevel enterprises up to medium-level enterprises. Third, the study does not explicitly focus on a specific area of performance parameters or support services or sectors. Rather, it includes and takes into account all possible aspects of support services and performance parameters with a potential significance in improving MSMEs growth and performance in any sector. Finally, most related works employ a quantitative research methodology to investigate impacts and effects of program interventions which in this research’s case is also found to be valid especially to investigate tangible aspects of changes in business performance.

In addition, this study will not deep dive on a specific set of behaviors or traits of entrepreneurs as well as detailed investigation of personality traits that contributes for growth and performance of enterprises rather it generally considers any kind of behaviors or entrepreneurial traits that complements the programs of EDC Ethiopia more specifically the ones that are part of UNCTAD’s EMPERTEC Program. It does not also get into comparison, or cross-tabulation of which personality traits or competencies had more effect than the other ones or vice versa due to the high psychological/qualitative nature of the parameters and the need to involve a more broad scientific and psychological/psychometric measurement criteria and tools to be able to draw concrete information from the data. However, the study will overlook at general behavioral changes and practices generated on MSMEs as a result of program interventions of EDC Ethiopia.

Conceptual framework

The conceptual framework developed for this study that depicts the overall relationship between the dependent and independent variables is shown as follows: (Figure 1)

Figure 1. Entrepreneurship Program

Research Design and Methods

General approach

A quantitative research methodology is found to be best suited for this study considering the detailed empirical investigations required to answer the research questions, the quantitative nature of major parameters used to evaluate the overall program packages against MSMEs growth and performance, nature and business experience of the target groups involved. Quantitative research methodology will be used to determine the tangible aspects of the effect of the interventions of EDC Ethiopia on growth and performance of MSMEs. Hence, it is believed that the quantitative research method is independently sufficient to meet the objectives of this study. Respondents for the study will be EDC Ethiopia clients that have passed through both the behaviorbased entrepreneurship-training program and the BDS interventions from Addis Ababa, Amhara Region and SNNPR Region. These locations are selected based on a preliminary discussion conducted with EDC Ethiopia taking into account the wide availability and concentration of the target groups suitable for this study and to avoid possible limitations that might be faced to gather data.

Research design

This study is designed as an exploratory research that follows a quantitative research methodology given the fact that the research questions have not been investigated in depth by EDC Ethiopia. The study is also cross-sectional given its focus on investigating the intermediate-level effects of EDC Ethiopia’s program interventions on growth and performance of MSMEs which is supposed to be studied within a specified duration of time.

Population and sampling

The population for this study are all MSMEs which are clients of EDC Ethiopia found in Addis Ababa, SNNPR and Amhara regions respectively who have accessed one of the behavioral based entrepreneurship training programs and the follow up BDS support services. Probability sampling technique is used to determine the sample size for the study and specifically systematic sampling is used to identify samples from each region. This method is mainly used due to its advantages in eliminating a phenomenon of clustered selection and a low probability of contaminating data [25]. Even though literatures indicate that there are risks of data manipulation while following systematic sampling technique the researcher will be following all validity, reliability and ethical procedures to make sure the sampling process is free of bias on top of randomly arranging the population’s data regardless of selection categories such as sector, region, type and additional parameters. Based on the overall information collected from EDC Ethiopia the total number of clients within this frame are 17,785. Hence, using Slovin’s formula for sample calculation the sample size for this study is determined as follows:

n = N / (1+(N*e^2))

Where n= sample size, N = population size, e = margin of error (0.05). Accordingly, the total number of samples will be 391 with a confidence level of 95% and a margin of error 5%. To compensate for possible non-responses, 5% of the samples are additionally considered for responses which will make the total number of samples to be 410. Hence, the systematic sampling interval (n/N) would be 410/17,785 which is 0.02 i.e. two in every hundredth of the respondents will be selected from the randomized list of the population to be included in the study.

Data analysis approaches and techniques

Descriptive statistics is primarily used for data analysis in the study. Data is collected through experienced BDS advisors of EDC Ethiopia from each targeted locations and is then enumerated and processed using SPSS version 20. In order to determine and understand the underpinning relationships among the dependent and independent variables associated, the study also makes use of inferential statistical analysis tools such as correlation and regression. Hence, Pearson’s correlation and multivariate regression analysis are used to measure the effects of the program interventions on the actual growth and performance of MSMEs. The data collected from the FGD interview is analyzed in a similar approach but on a separate SPSS data file considering variable differences. The summary of findings of the quantitative and statistical analysis are then presented through percentages, frequencies and means using illustrations such as tables and charts. Data interpretation is implemented and presented following processes including: transcription, categorization, consolidation, triangulation, narrations, comparison of findings, contextualization and inferences.

Results and Discussion

Response rate

As per the descriptions and processes outlined in the research design section of the study, the questionnaire instrument for the quantitative aspect of the study was distributed for clients of EDC Ethiopia that took part in both the behavioral entrepreneurship training program and business development support services in the selected institution’s operational areas i.e. Addis Ababa, Amhara Region and SNNPR Region. Accordingly, the total number of questionnaires distributed was 395 and the total number of actual data obtained from the respective locations is 335 indicating an 85% response rate. The table below illustrates the regional distribution of the respondent’s response rates: (Table 1)

Table 1: Response Rates Categorized by Regions. Source: Own Survey, 2022.

Quantitative data presentation and analysis:

Demographic characteristics of respondents: Based on the findings of the data analysis, 62% of the respondents are male and the remaining 38% are women MSME owners. The minimum age recorded stands at 19, maximum age stands at 63, mean age is 30 and median is 29. (Figure 2)

Figure 2. Respondents Sex and Age Distribution. Source: Own Survey, 2022

Majority of respondents i.e. 54.9% are MSMEs selected from Addis Ababa, 32.5% are from Amhara Region and the remaining 12.5% from SNNPR Region where educational level of respondents spans from primary-level education up to MSC and above as shown in Table 2 below. (Table 2)

Educational Level	Frequency	Valid Percent
Degree	131	39.3
Diploma (or 10+)	116	34.8
High school	60	18
Msc & Above	19	5.7
Primary	7	2.1
Total	333	100
999	2
Total	335

Table 2: Respondents Educational Level. Source: Own Survey, 2022.

As can be seen on Table 3 below, employment status of 17.3% of respondents before or during taking part in EDC Ethiopia’s services was ‘Unemployed’ which later dropped to 8.7% after access to services. On contrary, even though employment in own business has increased from 57.9% to 60.8%, the percentage of employment in government, non-governmental and private sectors respectively has also increased dramatically which poses a question for further investigation. Doing so, it was determined that some MSMEs in this category have halted operation due to causes related with lack of access to finance, market, working premises and the Covid-19 pandemic. (Table 3)

Employment Status	Employment Before/During Service Access		Employment After Service Access
	Frequency	Valid Percent	Frequency	Valid Percent
Employed in own business	194	57.9	204	60.8
Government em- ployee	27	8.1	58	17.3
NGO employee	8	2.4	12	3.6
Other	1	0.3	1	0.3
Private sector em- ployee	13	3.9	28	8.4
Student	34	10.1	3	0.9
Unemployed	58	17.3	29	8.7

Table 3: Employment Status Before and After Service. Source: Own Survey, 2022.

Analysis summary of services accessed from edc ethiopia: 100% of the respondents in this study have accessed both the behavioral entrepreneurshiptraining program interventions and various kinds of business development service interventions ranging between the year 2016 through 2020 in which 73% of respondents accessed the behavioral entrepreneurship-training program between 2019 and 2020. The analysis also showed that respondents accessed EDC Ethiopia’s group BDS support services between the years 2018 through 2021 in which almost 83% got the service between 2019 and 2020. The disparity between access to the training service and BDS support services is mainly because of the long queue that exists for accessing BDS support due to budget limitations. Among the MSMEs that have gone through group BDS sessions, 30% have also gone through the intensive 1-1 BDS support services between the years 2018 through 2021 in which 26.6% of respondents have also accessed a financial linkage services between the years 2018 through 2020.

Behavioral entrepreneurship training program analysis: As part of evaluating the behavioralentrepreneurship training program intermediate level outcomes, 82.6%% of the respondents have indicated that the training services they have accessed from EDC Ethiopia has been found to be instrumental for their trends in doing business on a day to day basis. Furthermore, respondents have expressed the positive change they have observed concerning the way they do day-to-day business operations, the way they perceive entrepreneurship, improvement in business management skills and hands-on business skills such as expanding their networks, designing and developing their business models, plans and strategies. Table below summarizes the analysis in this aspect from the valid responses gathered from 84% of the respondents. Accordingly, on average 86% of respondents indicated that they either agree or strongly agree on the notion that they have observed practical changes on the measurement parameters, 4% indicated that they disagree with the statements or the changes and an average 10% of respondents are neutral about stating their responses on this matter or they do not know the actual changes they have brought. (Table 4)

Changes Observed	Success Biz. Person	Business Network	Business Mgt.	New Biz. Opportunity	Biz. Model, Plan	Attitudinal Change
I agree	59.8	68.7	67.1	66.2	53.2	68.4
I disagree	3.6	1.8	0.4	0.7	14.9	0.4
I strongly agree	18.1	18.9	24.3	26	21.3	25.9
I strongly disagree	0.4
Neutral/I don't know	18.1	10.7	8.2	7.1	10.6	5.3
Missing	54	54	55	54	53	53

Table 4: Attitudinal & Business Operation Changes. Source: Own Survey, 2022.

Regarding the actual practice and applicability of the behavioral-entrepreneurship training concepts, competencies and skills on a day to day basis, 33.7% of respondents indicated that they always use the skills they have gained in their ventures, 33.4% use it as needed, 28.1% use it sometimes and 1.2% (4 respondents) indicated that they have not used the skills gained as shown in the figure below. Similarly, 99% of the respondents have indicated that the behavioral-entrepreneurship training program they have accessed has improved their personal entrepreneurial competencies. (Figure 3)

Figure 3. Applicability of Skills and Competencies on Business.

Respondents’ response towards their practice trends of the standard ten Personal Entrepreneurial Competencies (PECs) in their day-to-day business operation which are basically the behavioral building blocks of EDC Ethiopia’s entrepreneurship training program are summarized in the table below as follows. (Table 5)

Practice Trends (%)	PEC1	PEC2	PEC3	PEC4	PEC5	PEC6	PEC7	PEC8	PEC9	PEC10
Always	43.8	27.2	30.2	35.5	36.3	37.4	42.5	37	16.9	64.5
As needed	33.5	43.4	37.1	36.1	34.8	40.4	29.9	27.1	45.2	16.1
Not at all	0.3	1.2	32.6	1.5	0.3	0.3	27.5	3.6	8.7	0.3
Sometimes	22.4	28.1		26.8	28.5	21.9		32.2	29.2	19.1
999	4	1	1	3	1	1	3	3	3	0

Table 5: Practice Trends of PECs. Source: Own Survey, 2022.

Based on the analysis on Table 5 above, from the response articulated from 99% of the respondents indicate that an average 37.2% of the respondents practice the PECs always, 34.4% use it as needed, 26% use it sometimes and the remaining 7.6% have not practiced the competencies at all. Feedback from almost 99% of the respondents indicate that they are impressed with the behavioral training program provided to them in which 48% of the respondents have stated that they are even willing to pay for such services. This is also an indicator for the very high demand generated to the various types of behavioral training program packages of EDC Ethiopia. Among the reasons stated by respondents why they were not willing to pay for such services, 43.3% indicated that it has to be free considering it’s a UNDP program, 8.4% indicated they cannot afford to pay for the services where as one respondent indicated that the training program was poor and does not deserve that.

BDS support services intervention analysis: As described in earlier sections almost 70% of the respondents in this study have accessed a group BDS support whereas the remaining 30% have gone through an intensive 1-1 BDS support. The group BDS program involves delivery of a set of business enhancement support services for a group of MSMEs with similar service needs mostly focusing in the areas of fundamental business functions such as business operations, marketing, human resource management, finance and accounting, business model and business plan development. The 1-1 BDS intervention provided for MSMEs involves the delivery of an intensive follow up service for enterprises after going through a business diagnosis survey and providing an onsite support for a period that lasts up to six months.

The BDS support packages are delivered for MSMEs that have a tangible growth potential determined by a thorough application process. Accordingly, as a result of these BDS interventions provided for an average of 71.3% of the valid responses, 60% of respondents have indicated that they have established new businesses, 54% formalized their businesses through registration and obtaining a legal registration and business license documents, 87.5% have prepared a business plan, 59.3% are able to expand and diversify their existing businesses, 91.2% started to implement a standard book keeping system or improved their existing financial management systems, 91.6% improved their customer handling operations, 79.2% have been able to prepare a marketing and promotion plan or strategy, 80% have adopted a cost effective production systems, 84.2% started to implement standard inventory management practices, and 71.5% improved their employee management practices. The below table summarizes the BDS outcome result as follows: (Table 6)

Biz. Im- prove	New Biz.	Formal	Biz. Plan	Ex- pand	Fi- nance Syst.	Cust. Mgt.	Mrktg.	Cost Mgt.	Inven- tory	Staff Mgt.
No	39.4	46	12.5	40.7	8.8	8.4	20.8	20.1	15.8	28.5
Yes	60.6	54	87.5	59.3	91.2	91.6	79.2	79.9	84.2	71.5
Total	100	100	100	100	100	100	100	100	100	100
999	208	209	55	104	51	49	76	81	69	58

Table 6: Business Improvements Observed. Source: Own Survey, 2022.

With regards to the state of the demand for the BDS program package, from the total 76.4% of the valid responses captured, 74% of the respondents in the BDS support packages have indicated that they are willing to pay for the services both group and 1-1 BDS support services which are usually considered expensive.

Another critical theme in BDS section data analysis is assessing the business performance improvement of MSMEs in which from the total 90.4% of valid responses, 86.6% of respondents have indicated that the BDS support services they have accessed has contributed to improvement in their business performance. With respect to assessing the analysis of 80% of the valid respondents business performance parameters, an average 56% of the respondents agree or strongly agree with the improvement in the business performance parameters, 35% either disagree or strongly disagree with the notion that their MSMEs have not shown as such improvement in performance whereas the remaining 9% of the respondents provided a neutral response or they do not know whether their business has performed or not as a result of the BDS program interventions. With regards to the estimated percentage increase in the MSMEs biannual or annual revenue, the average revenue increase is discovered to be around 35.3% whereas the minimum revenue increase is recorded to be 4%. Similarly, the average estimated profit generated by the MSMEs is 33.2% whereas the minimum profit generated stands at 4%. The table below summarizes the business performance changes observed among the MSMEs. (Table 7)

Change	Qual.	Tech.	Fin.	Revenue	Profit	Custom- er	Mrkt.	Ex- port	Branch	Avg
I agree	38.1	28.1	42	56.8	57.8	38.7	24.7	1.7	49.7	37.5
I disagree	38.1	36.8	21	7.3	8	38	48.2	61.6	23.6	31.4
I strongly agree	18.9	17.1	20.7	25.6	24.6	14.3	13	30.1	2.1	18.5
I strongly dis- agree			4.7	0.3	0.3	0.3	0.3		15.4	3.6
Neutral/ I don't know	5	18.1	11.7	10	9.3	8.7	13.7	6.5	9.2	10.2
999	33	36	35	34	34	35	36	292	43	64.2

Table 7: Business Performance Changes Observed. Source: Own Survey, 2022.

Another factor analyzed as part of the business performance analysis is the number of jobs created before and after the respondents have accessed services. Accordingly, from 58% of the valid responses captured, the average number of permanent jobs created after the program interventions is 10.47% with a slight increment of 0.22%, the average number of temporary jobs created is 12.68% with a 2.41% increase and the overall average total number of jobs created after the program interventions is 17.07% with a 4.65% increase. The average total number of jobs created for female employees after program intervention is 9.26% which has also increased by 2.26%. (Table 8)

Average % of Jobs Created	Before	After
Permanent	10.25	10.47
Temporary	10.27	12.68
Total Avg	12.42	17.07

Table 8: Average Number of Jobs Created Before & After Program. Source: Own Survey, 2022.

As can be seen in the below figure, 84% of the respondents have indicated an increase in profitability in which the average percentage of increase in profitability rate is recorded at 33%, the minimum rate is 2% and the maximum rate is 100% during the past three months.

The average monthly revenue is 62,708 ETB with 218,712 ETB being the maximum and 2000 ETB being the minimum monthly income.

In terms of performance in creating job opportunities among existing enterprises and startup enterprises, the total average jobs created by existing enterprises is around 10 whereas startups have created an average of 3 employees in general. The valid response rates for both the existing and startup MSMEs is 76% and 9% respectively. (Table 9)

Existing MSMEs Average Increase in No. of Employees (Based on 76% valid responses)		Startup MSMEs Average In- crease in No. of Employees (Based on 9% valid responses)
Permanent	7.6	2.3
Temporary	8.6	3
Total Avg	10.46	3

Table 9: Average Increase in # of Employees Source: Own Survey, 2022.

Aside from the business performance evaluation of the MSMEs, both the existing and startup enterprises have also provided critical feedbacks to support the improvement of the overall service delivery of both the training and BDS service packages. Some of the most notable ones are: provision of finance (loan provision), provision of demand based trainings and BDS, materials should be in local languages other than English and Amharic, one-to-one service delivery should be more practice oriented, provision of supplemental materials/ books/ reference materials, service should have continuity, business plan development support should expand, provision of working premises and follow up service of BDS advisors must be strictly followed and empirically evaluated on practical changes observed and the impacts they have brought.

Correlation analysis

Correlation between driving factors for business establishment & sustainability and MSMEs growth and performance: In order to measure any probable relationships among these two variables i.e. initiation factors for business establishment and MSMEs growth and performance, Pearson’s Correlation Coefficient is computed which ranges from +1 (indicating a perfect sync or positive correlation in which when one variable increases so does the other variable), to 0 (indicating no correlations) and -1 (indicating a negative correlation in which when one variable increases the other decreases). [26]. Accordingly, table 10 and 11 below illustrates the detailed correlation between initiation factors for business establishment and MSMS growth and performance categorized as cluster 1 and 2. (Table 10 and 11)

Table 10: Correlation between Driving Factors for Business Establishment & Sustainability and MSMEs Growth & Performance – Cluster 1, Source: Own Survey (2022).

Table 11: Correlation between Driving Factors for Business Establishment & Sustainability and MSMEs Growth & Performance – Cluster 2, Source: Own Survey (2022).

Based on the above summary of the correlation between driving factors for business initiation & sustainability, and its respective effect on MSMEs growth and performance, the variable’s relationship is found to be linear and positive that ranges from a positive intermediate relationship up to a weak statistically not significant relationship. For instance, the overall correlation between the independent variable indicators for business initiation and sustainability with the dependent variable indicators revealed an intermediate significance in an increase in access to finance (r=0.288, P=0.00), improved staff management (r=0.172, P<0.01), branch expansion (r=0.138, P<0.05), export market engagement (r=0.128, P<0.05) and an increase in product quality (r=0.165, P<0.05). On the contrary, a statistically significant but weak relationship is also revealed among other relationship settings such as new business formation (r=0.082, P>0.05), financial system improvement (r=0.041, P>0.05), new technology adaptation (r=0.007, P>0.05), increase in revenue (r=0.031, P>0.05) and increase in profit (r=0.039, P>0.05). A strong positive relationship is also observed among independent variable indicators such as an overall change in business operation, direct program intervention contribution and overall program effect on MSME growth and performance indicators such as improved quality (r=0.516, P=0.00), increased profit (r=0.701, P=0.00), increased revenue (r=0.704, P=0.00), market expansion (r=0.506, P=0.00), and customer base growth (r=0.519, P=0.00).

Overall, a moderate-level statistically significant correlation is observed among driving factors for business establishment and sustainability and MSMEs growth and performance. Basically, the driving factor indicators in this study includes access to behaviorbased entrepreneurship trainings and BDS support services including both group and 1-1 supports, access to finance, access to working premises and other related support services. Nganu [27] indicates that business initiation and sustainability factors play a critical role in ensuring MSMEs growth and performance which is found to also be valid in this research’s case. Nganu’s [27] analysis results showed a significant positive correlation among such factors on firms performance with r=0.460, P=0.14 with a 21.2% variability in the firm’s performance. The findings of the study also aligns with Tambwe’s [28] results in which the relationship between entrepreneurship training and MSEs performance indicated a strong positive correlation with r=0.689, P=0.00. Tarko [29] also determined a statistically significant relationship between entrepreneurship training and attitude with the innovation of MSEs.

Correlation between technical BDS support and MSMEs growth and performance: The tables below (12 and 13) illustrates the detailed correlation between business operation and management skills and MSMEs growth and performance. (Table 12 and 13)