DETERMINANTS OF SMALL AND MEDIUM ENTERPRISE'S SUSTAINABILITY: -THE CASE OF WORABE TOWN, IN SILTIE ZONE, CENTERAL ETHIOPIA REGIONAL STATE.

ABSTRACT Small and Medium enterprises (SMEs) play an essential role in the sustainable development of a country. They help in employment generation, job creation, self-independence, industrial production increase, and export. The study examines factors that determine sustainability of small and medium enterprises in Werabe Town in the Siltie Zone central Ethiopia regional state. The general purpose of the study was to identify the major determinant factors that influencing sustainability of small and medium scale enterprises. And Primary and secondary data were used for this study. The target population was small and medium Government organized enterprises in Werabe Town in the Siltie Zone central Ethiopia regional state. Data were collected using questionnaires from 178 SMEs. The selection of respondents was done using multi- stage sampling technique. The data collected were analyzed by using appropriate descriptive statistics and multinomial logistic regression techniques. The data have been analyzed with the help of STATA software. Data analysis reveals that respondents generally express confidence in their business capabilities, though challenges persist in areas such as market forecasting, internal communication, and promotional effectiveness. Multinomial Logistic Regression (MLogit) modeling highlights the significant roles of management, marketing, government support, and financial factors in SME progression through different growth stages. Strong management and marketing capabilities emerge as pivotal, increasing the likelihood of transitioning from startup to ramp-up and matured phases by substantial margins. Government initiatives and financial accessibility also play critical roles, with targeted support enhancing growth potential. However, neutral and negative responses in areas such as infrastructure, bureaucracy, and financial clarity indicate the need for improvements. The findings underscore the importance of collaborative efforts among businesses, governments, and financial institutions to address these challenges, fostering a robust and sustainable SME sector vital to economic development.