Abstract
Micro and small scale enterprises are the backbone of any developing economy, with their effective innovative, professional skills. MSEs develop the economy,by generating employment opportunities, reducing regional imbalances, fostering equitable economic growth and alleviating poverty. Ethiopian Government has also recognized the role of Micro and Small Scale Industries in the economic development. Deliberate efforts to promote these industries are already in place in Ethiopia. But there are so many factors, which should be analyzed, for the better performance of these industries, which could help the economy to generate sufficient revenues. Hence this study is an attempt to analyze factors such as entrepreneurs' skill, access to finance, market, training, legal and regulatory framework and infrastructure, which affect the performance of micro and small enterprises in Ethiopia. Primary data and secondary data were used. Primary data were collected from 198 respondents, by using well organized self-administered questionnaire. For analyzing the data, statistical tools like Pearson 's Correlation Coefficient and Regression analyses were used.