Abstract
Support to small and medium enterprises (SMEs) can improve their revenue and profits, their ability to create jobs, labour productivity and their ability to invest. But these effects are not large, and the cost effectiveness of the interventions not known. The effects on innovation are unclear.What is this review about?Large amounts of funding are going towards programmes to support small and medium enterprises (SMEs) in low- and middle-income countries in order to increase revenue and profits, generate employment, and, so, create economic growth and reduce poverty.The Campbell review summarizes evidence of the impact of these programmes on measures of SME performance including revenues, profits, and productivity, as well as the firms’ ability to generate employment and their labour productivity.
Highlights
BACKGROUND AND OBJECTIVES OF THE REVIEWBusiness support interventions in low and middle-income countries (LMICs) direct a large amount of resources to small and medium enterprise (SME), with the assumption that institutional constraints impede small and medium-sized enterprises (SMEs) from generating profits and employment at the firm level, which in turn is thought to impede economic growth and poverty reduction
When the analysis is disaggregated by type of intervention, we find that matching grants continue to show a positive impact on firms’ performance and employment of similar magnitude and precision once we exclude some outliers
It was noted that the great majority either did not use quantitative methods to assess the impact of an intervention, did not use a rigorous method to address selection problems, or looked at interventions targeting micro-entrepreneurs (21 cases)
Summary
Business support interventions in low and middle-income countries (LMICs) direct a large amount of resources to SMEs, with the assumption that institutional constraints impede small and medium-sized enterprises (SMEs) from generating profits and employment at the firm level, which in turn is thought to impede economic growth and poverty reduction. Despite this abundance of resources, very little is known about the impact of such interventions. The country was noted in 2011, as having problems with contract enforcement and with institutional challenges to establishing businesses (WEF 2011)
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