FACTORS AFFECTING THE SUSTAINABILITY OF SMALL AND MEDIUM SCALE ENTERPRISES: THE CASE OF HARAR TOWN

Abstract

The study undertakes the Sustainability of small and medium scale enterprise through primary data. This study contributes indispensable economic roles and taken as the engine of economic diversification and poverty alleviation. It identifies the relevant factors affecting SME enable them to maintain their business in spite of challenges in the business world. In Ethiopia, the Government has been encouraging SMEs by designing and implementing Small and Medium En terprises development and the number of SMEs in the country is steadily growing, but most SMEs are hibernating from growing and striving to pass from lower stage to higher stage due to many underlying factors. This study used quantitative data that collected through stratified ran dom sampling method. The collected data was analyzed by appropriate descriptive statistics and multinomial logistic regression model through SPSS V.20. among The Dependent Variable, the age of Enterprise in the business was used as proxy or the Sustainability index of SME. The find ings show that the SMEs in manufacturing sector have more probability of sustainability com pared to trading, service and construction sectors. The findings further indicate SMEs that have more financial related opportunity have more probability of sustainability in the long run. The achievement of higher education is unrelated with the Sustainability of SME, because it may provide more options to work opportunity. For further analysis, researchers may recommend other indicators of the sustainability by using larger samples, and Advanced test of statistics jus tify findings of the factors affecting sustainability of SMEs in the case of Harari town