Determinants of SMEs growth and performance in Cameroon’s central and littoral provinces’ manufacturing and retail sectors

Abstract

Purpose – The purpose of this paper is to discuss growth and performance of small- and medium-size enterprises (SMEs) in Central and Littoral provinces of Cameroon’s manufacturing and retail sectors. Design/methodology/approach – A full survey of 700 randomly selected SMEs owner-managers was conducted though only 575 enterprises were retained for analysis after performing the coherence test. The survey was conducted in the central and littoral regions, the location of almost 70 per cent of the SMEs in Cameroon. The survey questionnaire administered consisted of about 50-60 questions covering the profile of the business owner, and business growth and performance. The full sample consists mainly of enterprises in the tertiary and secondary sectors. They were mostly retails and wholesales (supermarket, hardware shop, clothing shop, perfume shops and liquor store). Although, the secondary sector contributes 31 per cent of Cameroon's GDP and employs 15 per cent of the population, they are mostly large enterprises, with very few SMEs. Hence few businesses were interviewed in this sector. Findings – Business location affects turnover growth. The likelihood of negative growth or zero growth decreases with the age of enterprise. Increased levels of education result in improved turnover growth. There is no association of gender of with growth of business turnover. The burden imposed by municipal regulation and compliance with it negatively affects turnover growth. Time taken to be in compliance with tax regulations overall also negatively affects turnover growth. Social implications – Disseminating regulatory information to SMEs would be useful in order to improve compliance in general and newly formed enterprises located in the Littoral Province in particular. It is important to reduce regulatory burden on SMEs overall. Restrictive trade and business regulations in Africa tend to be largely devised through negotiated settlements with large corporates, and the onerous requirements tend to be inappropriate and out of reach for small, medium and micro firms. The business environment in the Littoral Province should be improved. Originality/value – Studies that examine econometric determinants of the growth of SMEs in Africa, and especially in Cameroon are few indeed. This is an area that is very crucial to examine and fully understand for policy development.