Formalizing Employment in Africa’s Small Firms: Experimental Evidence from Côte d’Ivoire

Small and medium enterprises (SMEs), defined in this review as businesses with up to 250 employees, are believed to be both an important tool in the fight against poverty and an important contributor to economic growth in developing countries. SMEs are responsible for the majority of employment generation in developed as well as in developing countries (Ayyagari et al., 2007). Given that SMEs play an important role in the formal labour force, the health of the sector has implications for employment generation policies and growth. Ayyagari et al. (2007) show that formal SMEs are responsible for most of the private sector employment in developed countries - for example, SMEs are responsible for around 60-70 per cent of employment generation in Germany, Finland, Belgium and Canada. However, in African countries SMEs are responsible for a smaller share of formal employment generation, providing only about 20 per cent of employment in Nigeria, Cote d'Ivoire and Cameroon. Ayyagari et al. also note that the SME sector's contribution to employment shows a strong positive correlation with GDP per capita. Thus, the evidence suggests that increasing this sector's contribution to employment might generate growth (Ayyagari et al., 2007; Beck et al., 2005), and therefore that effective business support services may positively affect GDP per capita. African economies have a lower percentage of formal workers in SMEs due to the fact that these economies have a larger (not computed) and less productive informal sector. Thus, in the path towards a more formalised labour market, employment generation by the SME sector plays a very important role. SMEs can further be linked to economic growth through their ability to link knowledge, product commercialisation and total factor productivity (Acs et al., 2009; Solow, 2007). A seminal study using a cross-section of countries to analyse SMEs and growth was provided by Beck et al. (2005), who found a positive but not causal relationship between SMEs and growth. An exploration of other available empirical evidence however, shows that while studies that focus on developed nations suggest a positive impact of SMEs and entrepreneurship on economic growth, studies examining developing countries suggest a negative impact (for example, Audretsch and Keilbach, 2004; Mueller, 2007; Cravo 2010; Cravo et al., 2012; Cravo et al., 2014).1 Acs et al. (2008) have attributed these differences in empirical results to different entrepreneurship responses to institutional arrangements. Moreover, heterogeneity in institutional arrangements is likely to provide different incentives to rent-seeking activities (Baumol, 1990). Thus, the role of SMEs in a given economy can be expected to vary depending on the institutional settings and level of development. Development agencies provide a considerable amount of targeted assistance to SMEs in low-and middle-income country economies (Beck et al., 2006). For instance, the World Bank devoted US$9.8 billion to SME projects during the period 2006–12 (IEG, 2013). For the same period, the support of the International Finance Corporation (IFC) of the World Bank Group directed to SMEs amounted to US $25 billion. However, there is limited evidence on the impact of SME support in the literature, due either to an insufficient number of studies employing convincing identification strategies to isolate the causal impact of the intervention under consideration, or to limited information regarding the mechanism underlying such interventions. This systematic review will draw on economic theory and qualitative studies to uncover the channels through which a particular intervention can affect the outcomes of interest. This research will therefore separate the outcomes into two categories, intermediate and final, wherever possible in order to uncover the theory of change of each intervention. In developing countries, programmes that support SMEs are based on the view that there are institutional constraints that impede SMEs from reaching their full potential to generate jobs and profits. Thus, the large amount of financial resources allocated to the development of the SME sector by governments and development organisations is designed to address institutional failures, and allow SMEs to operate more efficiently, thus leading to productivity growth (Beck et al., 2005).2 Various approaches are used to provide support services to SMEs. These mainly aim to improve the institutional setting and to remove those institutional constraints that prevent these firms from reaching their full potential and thus contributing effectively to economic growth and poverty alleviation. Based on a preliminary review of the literature, we have identified the main approaches to SME support as programs related to formalisation and the business environment, access to external markets, value chains and clusters, training and technical assistance, SME financing and innovation policy. This literature can be divided into two distinct themes. The first considers indirect support that addresses the constraints that prevent SMEs from getting access to credit, whereas the second addresses the impact of direct business support to SMEs. In the first strand, many studies look at the impact of an indirect type of public support aimed at SMEs, such as tax simplification, which intend to provide incentives for informal SMEs to formalise. The underlying assumption is that formal firms are less credit-constrained than their informal counterparts and therefore formalisation would be an effective way of helping entrepreneurs. Formalised firms are expected to have higher economies of scale and consequently be more productive, demand a more skilled labour force, and have higher profits. If informal firms are prevented from growing due to credit constraints, reducing the cost of formalisation should, indirectly, give firms the opportunity to escape from the low-scale-low-productivity trap. This intervention is an indirect form of public support because it is targeted to all firms with annual revenues below some threshold. All informal firms are incentivised to formalise through tax simplification. Those that decide to formalise are not directly offered any other type of public support. The second group of studies addresses the impact of direct business support to SMEs. They generally estimate the impact of a support programme to SMEs within a specific sector in a specific country, with the intervention based on the assumption that SMEs face constraints such as a limited pool of skilled labour, limited innovation capability and coordination failures. In this view, SMEs need public support to break the vicious circle of low investment and low productivity. A successful intervention might even generate (spillover) effects on firms that do not belong to the target group of the programme – firms from other sectors and/or informal firms in the same sector. This kind of support comes in the form of training programs, support for innovation or value chain and association strategies (for example, clusters) to address coordination failures. Notice that, unlike the indirect public support programmes, the unit of intervention is the firm itself. Firms are directly targeted with programmes that aim to help them shift from a low equilibrium (small size and scale) to a high equilibrium (bigger scale and dynamism). Workers are offered training, and transportation costs, spillover effects and coordination failures are directly affected by the creation of productive agglomerates. Since this review will investigate the impact of a diverse array of interventions, it is challenging to come up with a general theory of change. Although we provide a general theory of change based on our preliminary search of the literature in this section, it is with the caveat that each type of intervention identified in the initial search of the literature is based on an institution's belief in a particular causal chain. Therefore our approach to building out this theory of change will involve taking a case-by-case perspective on the assumptions regarding the causal chain of each of the programs analysed. As mentioned in Section 1.2, in general, support to SMEs is related to productivity growth and employment generation. Overall, the theory of change behind SME support services is linked to the improvement or creation of institutions that allow SMEs to reach their full potential. Figure 1 below provides a more general illustration of the theory of change for the intervention models we aim to survey in this review, as detailed in Table 1. Theory of change Within this general theory of change are contained those which are specific to the particular interventions shown: Tax simplification initiatives can be seen as a type of indirect business support to SMEs. These interventions aim at improving firm performance through the channel of formalisation. Economic theory suggests that formal firms will be able to grow with access to credit markets and by taking advantage of economies of scale. A tax simplification program could affect outcomes such as employment and profit through two intermediate outcomes: 1) formalisation rate, and 2) access to credit. The causal chain could be simplified as following: The necessary conditions for a tax simplification program shifts the informal entrepreneurs trapped in one equilibrium, characterised by low productivity and profits, to another where they face less constraints to growth after formalisation. There are plenty of studies that concentrate only on final outcomes, however, and shed no light on the mechanisms. Consequently, policy makers interested in knowing how such an intervention worked are given no guidance. We note that sub-components within the business support interventions that this review analyses may overlap. We will develop a conceptual model of intervention types to ensure appropriate categorisation of interventions for the analysis. A review such as this has the potential for significant policy relevance, given the amount of attention governments, development agencies and organisations around the world have dedicated to sponsoring a range of assistance programs targeted to SMEs and aimed at spurring firms' performance regarding innovation, productivity, exports and employment generation. Broader impacts on the economy such as higher wages and poverty reduction are also seen as by-products of such interventions (Beck et al., 2006). However, in spite of their prevalence worldwide, too little is known about the impact of SME support interventions. In a recent survey on SME policies in African countries, McKenzie (2011) shows that African firms are in general small, with up to 10 employees, but very heterogeneous in terms of employment, sales and access to external market. He also shows that although SMEs have been supported in several ways in African countries, rigorous evaluation of such policies is scant. This is surprising given that the SME sector is one of the main targets of international and national aid agencies (Cravo et al., 2014). This research intends to fill part of this gap by summarising systematically the rigorous evaluations done in the field so far, and feeding back the results to policymakers working on this problem worldwide. The policy relevance of this review is increased by the fact that it aims to distill the evidence on what works in Africa, and should therefore be particularly useful to policymakers and donor organisations interested in supporting SMEs in Africa. Among the Africa-specific issues we aim to address with this review, are the question of SMEs' potentially limited contribution to employment in African countries relative to other regions, and, in contrast, the potentially greater contribution to poverty reduction these enterprises may make in the African region in comparison to larger ones. The initial literature search for impact evaluations of indirect business support services suggests the existence of a considerable number of studies for Asian and Latin American low- and middle-income economies. Fajnzylber et al. (2011) and Monteiro and Assunção (2012) use quasi-experimental techniques to analyse the effect of a tax simplification program in Brazil on formalisation and firms' performance. McKenzie and Sakho (2010) use instrumental variable (IV) estimations and provide evidence on how tax registration affects profitability in Bolivia. Mel et al. (2012) study the effect of formalisation on profit, sales, new workers and other outcomes in Sri Lanka using IV estimations and Rand and Torm (2012) use matching and difference-in-difference techniques to assess how formalisation affects profit, access to credit and investment in Vietnam. For the African context, the available evidence is likely to be more limited. However, a detailed, comprehensive search and synthesis of the literature is necessary, with a particular focus on its applicability to the African context. As with the indirect interventions, the initial search of the literature for impact evaluations of direct support services indicates that there is limited evidence for Africa. In one of the few studies available, Mano et al. (2012) conduct a randomised experiment in Ghana to analyse the effect of SME training programs on sales, added value and profit. In the context of low-and-middle income countries as a whole, a considerable amount of evidence is available for Latin America. Benavente and Crespi (2003) analyse the effect of an association strategy on productivity in Chile, using difference-in-difference and matching methods. In another study of the Chilean case, Arraiz et al. (2012) analyse the effect of value chain support on sales, employment and exports using propensity score matching and difference-in-difference estimators. The literature also presents evidence on support for innovation in low- and middle-income countries. Castillo et al. (2011) provide evidence of the impact of process and innovation support on exporting, employment, wages and survival in Argentina, by combining propensity score matching and a difference-in-difference approach. Other studies analyse different types of support. Tan (2009) provides evidence for Chile for different SME programs of technical assistance, cluster programs, technology programs and credit programs on sales, output, employment, wage, productivity and exports. In addition, Ibarraran et al. (2009) study how training programs, access to credit, product innovation and ISO certification affect productivity using instrumental variables and matching methods in Latin American countries. Though most of the papers cited above indicate a positive effect of SME support programs on selected outcomes, there is a need to systematically review and synthesise the evidence to provide an unbiased account of the impact of these programs on firm performance. As the evidence appears to be predominantly from Latin America, its applicability to African countries, or any other context, is not straightforward due to lack of external validity that mark these studies. A comprehensive understanding of the mechanisms underlying the causal chain of an SME intervention is therefore crucial if one is interested in designing SME interventions in different contexts. Therefore, one of the aims of this review is to shed light on the impact of various programs, as well as on the mechanisms that could help us understand why similar programs succeed in some countries or contexts but fail in others. This review has some similarities with another Campbell-registered review, by Grimm and Paffhausen (2013). This other review, however, focuses on employment creation and business creation and will not systematically review evidence on firm performance such as productivity, revenues, profits, innovation, formalisation and access to credit – all of which are the main outcomes of interest of this review. To answer these questions, the research will cover both intermediate outcomes, such as access to credit, training, and formalisation, and final outcomes, such as higher profits, employment generation, productivity and access to external market, and will look for context-specific variables that can help us understand the causal chain of the intervention. We recognise that this is a very challenging exercise to be fully addressed by this systematic review. In fact, the main objective is to shed some light on the potential moderator variables linked to the institutional setting and level of development of each country. Assessing applicability of the results to specific local African context is not an easy task and goes beyond the scope of the systematic review, however, in order to allow the reader to relate the review findings to a specific context, the document will present relevant contextual and implementation information. This review will focus only on studies that evaluate policies aimed at supporting SMEs in low-and middle-income countries (as defined by the World Bank's classification), with an emphasis on African countries wherever possible. The focus on LMICs is justified firstly because private firms in these countries tend to be more labour intensive and less innovative, and consequently are the main employer of a large proportion of the labour force. Secondly, restricting the scope to LMICs helps to identify the binding constraints that SMEs might face in similar institutional contexts, such as in some African countries. The term SME covers a wide range of definitions and measures, varying from country to country and between the sources reporting SME statistics. Some of the commonly used criteria are the number of employees, total net assets, sales and investment level (Ayyagari et al., 2007). The most common criterion used to classify SMEs is based on employment information, due to data availability, and the cut-off used to define SMEs is usually 250 employees4. This review will use this cut-off of 250 employees. Consequently, other types of interventions aimed only at supporting entrepreneurship and the creation of microenterprises, such as microfinance5, will not be part of this research. This is because self-employed and micro-entrepreneurs have a different nature in comparison to SMEs6. The former, especially in LMICs, are comprised of less productive or informal enterprises of few employees in the fringe of the markets. Furthermore, these enterprises are not eligible to most of the public interventions to be covered in this review. Thus, the definition of SME based on number of employees fits well our purpose of covering a broad set of interventions and of considering relevance for African countries7. Since our prior assumption is that there will be only a few studies examining public interventions in African countries, a proper contextualisation of the interventions, a comprehensive understanding of the designs, the target groups, and the moderator variables ranging from those related to firms themselves (size, sector, number of years in operation) to those related to the country where the intervention take place will be crucial to this review. This will allow us to be able to shed some light on whether the intervention has some external validity and consequently whether it could potentially work in an African context.8 In order to address the likely problem of limited evidence, particularly of relevance to Africa, the scope of the review will include all studies identifying final and intermediate outcomes. This will also better inform the causal chain analysis which will help inform our tentative findings about generalisability to African countries. In the studies selected, we will then search for any information on how and why interventions worked or did not work. The literature recommends that synthesis is informed by the theory of change embedded in the design of an intervention (see Waddington et al., 2012b). However, our focus is not only on the impacts directly anticipated by the intervention but also included unanticipated impacts. We will include the following interventions: Formalisation/ Business Environment (Institutional Improvement): such as tax simplification, intended to provide incentives for informal SMEs to formalise. Underlying assumption: that formal firms are less credit-constrained than their informal counterparts and therefore formalisation would be an effective way to help entrepreneurs. Indirect support to SMEs may include policies regarding business registration, property registration and regulatory frameworks (Fajnzylber et al., 2011; Monteiro and Assunção, 2012; McKenzie, 2013). Exports/Access to External Markets: defined as interventions that correct market failures such as information externalities and help SMEs overcome obstacles to exporting (Volpe and Carballo, 2010; Volpe et al., 2010; World Bank, 2010). Support for innovation policies is based on the idea that social returns to innovation exceed private returns (Lundvall and Borras, 2005; Acs and designed to support innovation This review will different types of innovation support such as matching and tax as identified in the preliminary For instance, et al. evaluate the of matching provided after an for et al. (2012) analyse the impact of matching and credit for innovation, and et al. (2011) evaluate the effect of tax on Other of innovation support may also be identified during the search and interventions: defined as interventions that help firms from externalities and overcome the coordination failures that prevent SMEs from these externalities and et al., and technical defined as interventions that provide support for training and technical assistance, based on the idea that improve and wages of workers and to firm productivity et al., 2011; et al., 2007). This type of intervention also services and such as those by the World Bank et al. and et al. (2013). SME and in credit markets generate financial constraints, which in SME activities (Beck and and 2007; et al., The review will in this of interventions that provide or services to SMEs, such as those in World Bank (2010) for credit and in et al. (2009) for credit We note that sub-components within the business support interventions this review analyses may overlap. In this case, it will be important to them as as possible. If there is a analysis will be using detailed information on intervention however, this may not be possible if only a number of are To the of our knowledge, most of the papers the impact of a public policy targeted to SMEs a group with a group comparison group in the of quasi-experimental However, we will be studies that and from studies that have more than two we will also separate the evidence to the intervention In the of for instance, an intervention can use a an cluster or (see et al., have two they identify different and so and they in terms of data different rate, different of and so The selected studies on at one impact to do with outcomes, either or For the of this review, we will define firm performance impacts to to objective such as revenues, profits, innovation, formalisation, number of workers and access to credit. of firm performance impacts will be on and will be outcomes of SME support around better firm performance and growth and therefore can be revenues, profits, employment, productivity, innovation, and survival The following are of studies that we would to include in the review at these outcomes: Mano et (2012) experiment in Ghana to analyse the effect of SMEs training programme on sales, value added and Benavente and (2003) study of the effects of an association strategy on productivity in Arraiz et (2012) of the effect of value chain support on sales, employment and exports in (2009) evaluation of different Chilean SMEs programs for technical assistance, cluster programs, technology programs and credit programs on sales, output, employment, wage, productivity and and Castillo et (2011) study of the effects of process and innovation support on exporting, employment, wages and survival in outcomes vary to the type of but can be defined access to credit, training, tax simplification aimed at firms' formalisation, formalisation rate, policies aimed at improving the value and growth. These are all of direct intervention through outcomes. that provide access to credit aim to allow firms to an economic and/or As the firms in the market and the intended outcomes are survival and in productivity. with SME support related to innovation, training and the value chain the underlying assumption is that more skilled workers and a better value chain will in higher productivity, employment generation, access to markets and others. For instance, Ibarraran et al. (2009) focus on how interventions such as training programs, access to credit, product innovation and certification affect productivity of SMEs in Latin American countries. The review will draw on a broad search to identify studies that relate to the interventions aimed at SMEs in To address to the review will focus on analysis and include only studies that use and quasi-experimental such as design instrumental matching on propensity score matching and any other methods that to for (for example, selected have for the of program or into the and quasi-experimental methods are seen as the the main objective is to estimate the causal impact of an intervention or policy (see for et al., an intervention is designed or the identification strategy of an study convincing the findings on the impact of the program or intervention are to have that one can that the in the outcomes between and was by the This review will thus only studies that assess the impact of an intervention the and the at one or more in In where more than two are the can also involve comparison of the two The studies will therefore be from and data studies that on data show or use a matching to for in using matching for instance, should the intervention of the program to be able to make the that the problem of is due to the studies included will document the impact of any business support on SMEs to as In addition, the review will the impact of different types of business support on firm performance. As in Waddington et al. on studies that use and quasi-experimental methods may the studies that can be included in the review. Although this might be a particularly if one is interested in different interventions, we this because findings of studies that do not for their are of little relevance, and for The search strategy aims to cover as comprehensive a set of and sources as within the period because in the of the interventions of it is most likely that these have been in the formal literature on SMEs or in the literature on the part of national and international

This study examines the financial management of Micro Small and Medium Enterprises (MSMEs) in Indonesia and Malaysia which are the drivers of the economy in both countries, but this sector has not been able to become an independent sector and become the foundation of the national economy in both countries. The problem is that financial management in Micro Small and Medium Enterprises (MSMEs) ignores the importance of financial management standards, the problem is that poor financial management makes Micro Small and Medium Enterprises (MSMEs) insignificant in advancing the economy. The method used is descriptive qualitative with a case study approach. Data were obtained from MSME actors by distributing questionnaires and interviews. The results of this study indicate that MSME financial management in Indonesia is not as good as Micro Small and Medium Enterprises (MSMEs) in Malaysia, meaning that Malaysia has better MSME management, this can be seen from various research indicators, namely: planning indicators, budget use, recording, reporting and controlling. Micro Small and Medium Enterprises (MSMEs) in Indonesia and Malaysia when compared to Indonesian Micro Small and Medium Enterprises (MSMEs) do not have good planning, have not carried out standard records, standardized reporting, are not concerned with standard financial statements, balance sheets, profit and loss, cash flow, do not have or install systems in their business units, such as control of systems and procedures, billing records of sales notes, it is very clear that Micro Small and Medium Enterprises (MSMEs) in Indonesia have not done so. Meanwhile, from the other side, when compared to Indonesian MSME respondents, the level is very small, more so for micro cart businesses, small shops that are not in the form of their own buildings, the context is very small. In Malaysia, micro, small and medium enterprises are not comparable to the conditions in Indonesia, while in Malaysia, the Micro Small and Medium Enterprises (MSMEs) already have a more appropriate place. Thus, it is easier for Micro Small and Medium Enterprises (MSMEs) in Malaysia to get banking support, while Micro Small and Medium Enterprises (MSMEs) in Indonesia are still difficult to upgrade and are still difficult to enter the bank compared to Malaysia.

This study aims to determine the Determinants of the Performance of Small and Medium Enterprises (SMEs) in Barru Regency. The method used in this study is a quantitative approach and the type of research conducted is survey research. The population used is Small and Medium Enterprises in the manufacturing industry sector in Barru Regency, which is 1672 business units. The number of samples is 94 small and medium enterprises. The data sources used are primary data and secondary data. Analysis of the data used is multiple linear regression analysis. The results of this study indicate that the aspects of finance, environment, marketing, human resources, entrepreneurial ability and economic aspects have a positive and significant effect on the performance of small and medium enterprises in Barru Regency. The greater the equity, loan capital, the level of profits and capital accumulation, the greater the performance of small and medium enterprises. The better the technology and quality control, the availability of business places, government policies, seasons and infrastructure, the better the performance of small and medium enterprises. The more market demand, the better competing pricing, promotion, distribution channels and marketing areas, the better the performance of small and medium enterprises. The better the level of formal education, leadership, experience in business and the amount of motivation and skills in the performance of small and medium enterprises. The greater the desire for achievement, personal responsibility, management ability and innovation ability, the better the performance of small and medium enterprises. the higher the level of income of the community, the availability of jobs, a business climate and good investment and the better the economic growth, the better the performance of small and medium enterprises.

The Micro, Small and Medium Enterprises (MSME) sector has emerged as one of the most vibrant and dynamic sectors of the Indian economy in the last 5 decades. MSMEs not only play an important role in providing large number of employment opportunities at lower capital cost as compared to large industries but also help in industrialization of rural and backward areas, thus reducing regional imbalances, assure a more equitable distribution of national income and wealth. Micro, Small and Medium Enterprises (MSMEs) as ancillary units complement large industries and this sector contributes immensely to the socio-economic development of the country. Khadi is the glorious legacy of our National Freedom Movement and the Father of the Nation. Khadi and Village Industries (KVI) are the two national heritages of India. One of the most important aspects of KVI in the Indian economy is that it generates employment at very low per capita investment. The Ministry of Micro, Small and Medium Enterprises (MSME) in collaboration with the concerned Ministries/Departments, State Governments and other stakeholders by providing support to existing enterprises and encouraging new enterprises, will support the growth and development of the MSME sector including Khadi, Village Industries and Coir Industries. Along with the activities of Micro, Small and Medium Enterprises, the world market has also changed a lot. Today, for businesses to sustain, dynamism and entrepreneurship must continue to function to their full potential. We have seen in the past record of MSME development that, India has been able to achieve high growth of MSMEs in the country, with more emphasis on MSME Entrepreneurship Development programmed.

Orientation: This study explored the composite business success index (CBSI), a novel framework designed to enhance small and medium enterprise (SME) competitiveness in South Africa by integrating financial and cultural metrics. Research purpose: The aim was to introduce CBSI as a tool for assessing small and medium enterprise performance, combining financial indicators like the cash conversion cycle (CCC) and Altman Z-score with cultural metrics such as the Configurational Accuracy Score for a more holistic evaluation. Motivation for the study: Small and medium enterprises in South Africa face significant challenges, including financial instability and misalignment of organisational culture. Existing performance models often fail to address these non-financial factors, which CBSI integrates into one evaluative tool to improve both financial health and cultural alignment. Research design, approach and method: A pragmatist research approach integrated quantitative and qualitative methodologies, including financial data from small and medium enterprise statements, semi-structured interviews with small and medium enterprise owners and experts and questionnaires to collect cultural data for insight into the role of culture in small and medium enterprise success. Main findings: Composite Business Success Index proved effective in predicting small and medium enterprise performance. Higher CBSI scores (> 0.65) were associated with successful small and medium enterprises, while lower scores (< 0.50) indicated areas for improvement, highlighting the link between financial stability and organisational alignment. Practical/managerial implications: The CBSI offers small and medium enterprise leaders actionable insights for enhancing financial performance and organisational culture, boosting competitiveness and long-term sustainability. Contribution/value-add: By integrating both financial and cultural metrics into a single framework, the CBSI provides a novel tool for assessing and developing small and medium enterprise performance for the small and medium enterprise managers.

Research aims: The purpose of this study was to determine the credit distribution level used as working capital assistance for Micro, Small, and Medium Enterprises (MSMEs) during the COVID-19 pandemic.Design/Methodology/Approach: This study used a sample of 8 cities/regencies in East Java. Meanwhile, the Micro, Small, and Medium Enterprises (MSMEs) credit recipients were the population of the sample areas. This research's analysis model was panel data regression (generalized least square) by considering the emergence of heteroscedasticity in cross-section data between regional objects. The control variables outside the COVID-19 were the BI rate, third-party funds (TPF), and inflation.Research findings: This study’s results showed that the COVID-19 pandemic had a significant negative impact only on medium-sized business loans, while micro and small business loans are more resilient. Besides, Micro, Small, and Medium Enterprises (MSMEs) credit was significantly positively influenced by TPF; inflation did not affect credit; the BI rate only negatively affected medium-sized business credit.Theoretical contribution/Originality: Studies on Micro, Small, and Medium Enterprises (MSMEs) credit-related to economic phenomena and monetary policy have been widely carried out. However, the catastrophic virus that causes long-term economic uncertainty and impacts banks and Micro, Small, and Medium Enterprises (MSMEs) still requires in-depth study. Also, this study employed the GLS model that considers heteroscedasticity, which is still rarely used in previous studies.Practitioner/Policy implication: This research can be essential information for the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or OJK) and Bank Indonesia (BI) in policymaking, both regulatory aspects and bank liquidity provision, in stimulating Micro, Small, and Medium Enterprises (MSMEs) credit, especially in the COVID-19 pandemic era.Research limitation/implication: The impact of COVID-19 on Micro, Small, and Medium Enterprises (MSMEs) loans is still classified based on micro, small and medium. It is still not grouped based on the Micro, Small, and Medium Enterprises (MSMEs) business sector in various cities and regencies in East Java. The analysis has not been clustered based on the spatial concentration of the Micro, Small, and Medium Enterprises (MSMEs) recipient areas.

Marketing strategy holds a very important control in the success of product acceptance in the community, but many Small and Medium Enterprise (SME) ignore this. Labels and packaging are one of the keys for Small and Medium Enterprise (SME) to further increase the selling value of their products. Empowerment activities to improve the quality of Small and Medium Enterprise (SME) are carried out through assistance in making labels on packaged products. The object of this activity is Small and Medium Enterprise (SME) actors in Besuk Village, Bantaran District, and Probolinggo Regency. One of the Small and Medium Enterprise (SME) products in this village is banana chips, cassava chips, elephant ears, and lard. The problem with these Small and Medium Enterprise (SME) is the low quality of label and packaging designs for their products, as well as the lack of supporting facilities and infrastructure for designing product packaging labels. So that the products of Small and Medium Enterprise (SME) partners are less attractive than similar competitor products. The Small and Medium Enterprise (SME) products in Besuk Village it self also do not have a broad market share, so they are constrained in increasing the number of products that will be produced. Implementation methods used include: 1) pre-activity; 2) core activities; 3) activity evaluation. Where the problem solving of the Small and Medium Enterprise (SME) constraints above is in the form of assisting in making labels on packaged products so that they can meet the existing label requirements and also look more attractive. The results of the activity are in the form of training on the manufacture of product packaging labels as well as the manufacture of ready to use designs for these Small and Medium Enterprise (SME).

The dynamics of urban development coupled with economic growth have contributed positively to the development of small and medium enterprises (SMEs). Optimizing the utilization and strengthening of the capacity of SMEs’ human resources will encourage increased productivity of economic enterprises and the sustainability of small and medium enterprises (SMEs). This study aims to analyze (1) strengthening the capacity of human resources (HR) of small and medium enterprises to work as a determinant of increasing the productivity of small and medium enterprises (SMEs) and labor absorption; (2) the effect of strengthening the capacity of human resources (HR), business productivity, technology utilization, and business diversification on the sustainability of small and medium enterprises (SMEs); and (3) optimizing the role of government in supporting business development, increasing productivity, business stability and sustainability of small and medium enterprises (SMEs). This study uses a sequential explanatory design approach. Data were obtained through observation, in-depth interviews, surveys, and documentation. Qualitative analysis in this study was carried out through a process of data reduction, data presentation, and conclusion drawing, while the quantitative analysis in this study uses quantitative descriptive analysis, correlation, and multiple regression. The results showed that strengthening the capacity of human resources, coupled with the use of technology, and followed by diversification of business, had a positive contribution to increasing the productivity of small and medium enterprises (SMEs). Furthermore, strengthening human resource capacity, business productivity, technology utilization, and business diversification simultaneously have a positive and significant correlation to the sustainability of small and medium enterprises (SMEs) with a determination coefficient of 72.3%. This study recommends that government policy support through strengthening human resource capacity, increasing business productivity, technology utilization, and business diversification have an impact on the sustainability of small and medium enterprises (SMEs) in Makassar City, Indonesia.

Management of Innovation in Small and Medium Enterprises in India: A Barrier Approach

Using System Dynamics Approach to Support Sustainable Growth Number of Small and Medium Enterprises in Indonesia: Some Policies Consideration

This study wanted to know how the application of accounting at the micro small and medium enterprises (MSMEs), especially MSMEs in the town of Bandar Lampung as a first step in establishing research and development activities are appropriate at a time when that will come. The variables that will be seen as the application of accounting in MSMEs are: recording system and reporting for financial transactions, knowledge of micro small and medium businesses (MSMEs) on accounting, knowledge of micro small and medium businesses (MSMEs) about the tax, the use of information technology in business, and business decision-making system. The conclusion that can be generated from research that uses 55 micro small medium enterprises (MSMEs) as a sample of the research are: the micro small and medium businesses (MSMEs), most have not been doing the accounting process as a recording system that produces financial reports. The small micro business medium enterprises (MSMEs) have sufficient knowledge about the concept - general concepts of accounting but does not have sufficient knowledge about accounting process itself. Most of the small and medium businesses (MSMEs) do not have enough knowledge about taxation. the majority of the perpetrators of small and medium enterprises (MSMEs) are not applying information technology in their business field. Most of the small and medium businesses (MSMEs) make operational decisions with a rational business but still make plans only limited in memory just is not translated in the form of documents.  Keywords: Accounting Aplication, Micro Small and Medium Enterprises

The development of small and medium enterprises (SME) at a satisfied level can be achieved only through the application of knowledge and best practices that are developed at private sector, considering as their main derivation - the creation of new work places. The purpose of this paper is that even in our theory and practice to be provided modern concepts regarding the management of small and medium enterprises and regarding the business decision making. Small and medium enterprises can be considered as engines for the creation of new working places, in other words, can be considered as incubators for innovation and entrepreneurship. But in many poor countries, small and medium enterprises are not considered as the main players in the local ecosystem, which makes many of them operating outside the formal legal system and which phenomena results in the increase of informality and in the decrease of productivity. In addition, the condition becomes harder as they lack the funding and the long-term capital which on the other hand are the basis for the creation and function of companies. The development of SMEs is considered as the basic generator of economic growth. This development should be based on the advantages which should be further developed and on the obstacles and weaknesses, which, through strategies and means of economic policy, must be overcome and revitalized. Based on our studies, in the overall context of this work can be conducted the structuring of SMEs and the process of making business decisions in Kosovo. The focus of the analysis in this paper is the creation of friendly conditions for the development of small and medium enterprises towards employment policies and structural reforms, institutional market economy, generating of new work places. The necessity of these actions lays on the fact that in Kosovo exists a very large army of unemployed youth. The world today is undergoing through a global financial crisis which had started in the United States in 2008 and which has spread all around the globe. It can be said that this global financial crisis has been the longest that this world has recognized. For this reason, to the government of any country is added one more task, which is even more difficult, that through its policies to do the impossible in order to overcome this crisis and to send the respective country towards economic development, more specifically towards the development of the small and medium enterprise which in turn will have an impact on the decrease of unemployment. In addition, the purpose of this study would be to identify the current situation of small and medium enterprises, their structuring and their components in Kosovo.

The study analysed the processes involved in business planning, examined the challenges and problems faced by Nigerian entrepreneurs in business planning of Nigeria's Small and Medium Enterprises (SMEs); and how proper planning can promote their businesses. Primary data was used for this study and they were sourced from Small and Medium scale businesses in Ile-Ife through administration of structured questionnaire. The data collected were analysed using descriptive statistics such as tables, charts, frequencies, percentages. Findings showed that most entrepreneurs find out the demand of the market more than setting goals and objectives. Also results showed that economic instability and access to source of finance are major challenges facing SME's; and proper planning can increase the productivity and profitability of Small and Medium scale Enterprises in Nigeria. The study concluded that effective planning has a significant effect on the performance of small and medium enterprises in Nigeria. It is also recommended that specialised government sponsored institutions should be set up to help small firms by providing planning packages to entrepreneurs tailored to customised needs.

This study investigates the effects of the choice of financing on Small and Medium Enterprises (SMEs) in the context of Bahrain. SMEs play a major role in the private sector especially in emerging markets. However, information asymmetries between lenders and entrepreneurs raise the issue of the different financing implications on Small and Medium Enterprises' post-entry performance. Scholars have argued that findings resulting from studies conducted on markets in the Western context are challenged by non-Western contexts. While numerous works have studied the implication of financing structures on firm performance in developed markets, little work has been done on the effects of the choice of financing on firms in contexts outside the Western world. This investigation is tackled by conducting one-on-one in depth semi-structured interviews with entrepreneurs in the Kingdom of Bahrain. The findings identify three main methods of financing namely debt, subsidy and personal, friends and family financing, and highlight a flexible and adaptive approach to startup financing that is linked to better post-entry performance.

Micro, small, and medium enterprises (MSMEs) are the backbone of economic development in many low-and middle-income countries (LMICs).Their role is particularly important since they are estimated to make up the vast majority of food system businesses and play a critical role in achieving food security and supporting nutrition, as well as providing employment.To function optimally, business-support programmes and interventions are often developed based on the assumption that institutional constraints impede MSMEs from maximising their potential.Support services can be broadly grouped into financial assistance (e.g., grants, loans) and technical assistance (e.g., business development services, training, networking).There is evidence of positive impacts from implementing some of these interventions but also important evidence gaps, including the returns to investing in MSME business support services.This paper examined the benefit-cost-ratios from investing in six broad business support interventions for agrifood MSMEs across 90 LMICs in six World Bank regions.These interventions include: (1) a low-cost intensive mentoring and training for female managers of micro and small enterprises; (2) low-cost business development services for agrifood MSMEs; (3) peer-to-peer networking; (4) inter-firm relationship building and networking; (5) matching grants for obtaining management consulting services; and (6) grants for capital expenditure complemented with technical assistance.Benefits vary by firm size and across regions, with the sixth intervention, in particular, showing lower average benefit-to-cost for many firm types.Overall, however, the results indicate that most interventions produced enough benefits in improved sales to offset implementation costs, suggesting that most of the interventions can be economically viable under the right conditions, with net positive returns. KEY MESSAGES Supporting MSMEs can have large potential benefits for food security and nutrition in low-and middle-income countries, since these companies play critical roles throughout food supply chains. However, to ensure effective use of resources, it is also important to make sure that such support yields sufficient benefits to justify the costs. This analysis examined the benefit-cost ratios from investing in six broad business support interventions for agrifood MSMEs across 90 LMICs in six World Bank regions.The interventions included low-cost intensive training for female managers; low-cost business development services; business networking for enterprises; interfirm business associations; matching grants for obtaining management consulting services; and financial assistance for capital expenditures complemented with technical assistance. Results show some variation in benefits by firm size and regions but suggest that most interventions produced positive benefit-cost ratios -i.e., had sufficient benefits to justify their costs.Exceptions to this appeared to be mostly due to very costly interventions, as opposed to a lack of reported benefits.***Income Group LI -Low income LMI -Lower middle income UMI -Upper middle income