Assessment Of Factors Affecting Graduation Of Small Scale Enterprises To Medium Scale: The Case Of Dire Dawa Administration

The objectives of this study were to identify the major factors and challenges that affect the graduation of small enterprises, measuring the degree of influence of each factor on the graduation of SSE to MSE, and identify the major Challenges and opportunities for the graduation of small-scale enterprise in the study area. To address the objectives of the study mixed approaches were used. Descriptive research design was used for the study. The study population was about 345 small enterprises. Proportionate stratified random sampling technique was employed to select 182 samples for the study. That is to say, probability proportional to size (PPS) technique to determine the sample size followed by simple random sampling technique to draw individual sample were used to ensure representativeness of the population from all sub sector. Semi structured and structured interview schedules were used to collect qualitative and quantitative data respectively. Descriptive statistics was used to analyses the data. The findings of this study indicate among the factors included in the study, marketing factors, financial factors and working premises factors are the 1st ,2nd and 3rd major factors respectively, hampering the graduation of small enterprises in the study area. Rent seeking behavior observed in all actors, negative attitude towards products and services of MSE, dependency syndrome of enterprises on government support, lack of raw materials in the local market and price fluctuation, weak implementation of MSE and TVET strategies and poor coordination of stakeholders are the challenges of small enterprise graduation in the area under study. Thus, the important recommendations which are found to be of paramount importance from the findings of this study include: the administration should work hard focusing on problems/factors related to marketing, provision of finance and production premises; and the need to change the attitude of small enterprise owners and the society as the whole through awareness creation and education;