FACTORS AFFECTING THE TRANSFORMATION OF MICRO AND SMALL ENTERPRISE TO MEDIUM ENTERPRISE (A CASE STUDY IN WUCHALE WOREDA) .

This research examined the factors affect the transformation of Micro and Small Enterprises to medium in Wuchale Woreda, assessed how independent variable such as: training, management, work culture and saving, finance, market chain and infrastructural factor were affect the transformation of Micro and small Enterprises to medium enterprise. Micro and Small enterprises are best known as the structure back bone of both developed and emerging economy and make job opportunity for unemployment . In this research transformation of Micro and small enterprises to medium enterprise was measured with profitability and make job opportunity and accessibility of internal and external environment of enterprise. The fundamental objective of this study is to assess factors affecting the transformation of Micro and small enterprises to medium enterprise in Wuchale Woreda. The study was employed both mixed quantitative and qualitative research design. Both primary and secondary data were employed. Questionnaire, interview and observation were the main data collection instruments. The sample size 162 MSEs were selected using census sampling method and stratified sampling technique After the data has been collected, it was analyzed using simple statistical techniques descriptive statistics correlation and inferential statistics regression model with the help of Statistical Packages for Social Science (SPSS) were used to assess the relationships and differences between variables. Furthermore, the research finding show that among factors training, management, work culture and saving, finance, market chain and infrastructural are the major factors affecting the transformation of SMEs to medium enterprise in wuchale woreda. The result show descriptive the factor are and highly or strongly affect the transformation of SMEs to medium enterprise the mean 4.62 and Std. Deviation 0.61 by percentage more than 90% . The relationship among of independent variable are slight, small, moderate and very strong positive significant statistics correlation relationship. The regression show R Square value of 0.281 and adjusted R square value of 0.252, it may be realized that 28.1% of the variation in transformation of SMEs to medium enterprise. The assumption of data normality show skewness +2.46 and Kurtosi -2.48 data normality assumption were normal distributed. The reliability of data result show 0.89 which categories under excellent reliability data according to Cronbach‘s alpha reliability coefficient normally ranges and more than 0.7 acceptable data and good. Finally I recommended that, improve factor affecting the transformation of Micro and small enterprises to medium enterprise, government and other should stake holder undertake the 6 external factor like infrastructure , facilitate source of finance and market chain or linkage. Internally to make MSEs competitive and profitable, increase the capacity, knowledge and skill of operators, work culture and saving, experience sharing from successful enterprises, and provision of advice and Consultancy, continuous capacity building should be done by SMEs them self and by stake holder like government, NGO and other stake holder.