FACTORS CONSTRAINING GRADUATION OF SMALL ENTERPRISES TO MEDIUM SCALE ENTERPRISES IN WERABE TOWN OF THE SILTE ZONE, CENTRAL ETHIOPIA REGIONAL STATES.

ABSTRACT This study examines the factors that hamper the<br> graduation of MSEs into medium scale enterprises<br> in Werabe Town, Central Ethiopia. An integrated mixed method approach is used in this study to get<br> an in depth understanding of the dynamics affecting enterprise growth. Stratified random sampling<br> w as used to classify and select manufacturing, construction, urban agriculture, and trade service<br> sectors and finally, to select 299 respondents the researcher used simple random sampling with<br> proportional allocation methods . Data collection was conducted by the use of structured<br> questionnaires and interviews in order to capture both macro level factors including access to<br> finance, infrastructure, market conditions, and entrepreneurial skills firm specific factors. The<br> results specified that raw materials, infrastructure, market conditions, and access to finance are the<br> key factors in determining the potentials for growth of small enterprises. Entrepreneurial skills do<br> contribute to growth but are relatively weaker as compared to the above mentioned factors. Based<br> on these results, it has been concluded that the study that access to finance advisable to be improved<br> with customized loan products, essential infrastructure needs to be upgraded , raw material<br> availability advisable to be improved through cooperative arrangements, and entrepreneurial skills<br> need to be strengthened by comprehensive training programs. The research underlines that<br> addressing such critical factors will ensure a favorable investment climate that enhances growth in<br> the small enterprises to develop the economy within the region. This also means that additional<br> studies are needed concerning external factors, like government policies and technological changes,<br> which could influence MSE graduation.