Development Of SME Sector Research Articles

SMEs Behavioral Intention towards Usage of Financial Products: A Comparative Study of Islamic and Conventional Banks in Pakistan


 
 
 
 Purpose: This study has emphasized that understanding SMEs’ financial behavior towards Islamic/conventional banking products is prerequisite for policy makers and managers of banking and non-banking financial institutions.
 Design/Methodology/Approach: A conceptual framework has been discussed in present study to understand financial behavior of SMEs towards adoption of conventional or Islamic financial products. Moreover, to identify the determinants of SMEs owner-managers behavioral intention which influence their financial decisions towards adoption of Islamic/conventional banking products.
 Findings: Prior research highlighted that for growth and development of SME sector it’s vital to fulfill their financial needs. In Islamic countries like Pakistan a large population of SME owner-managers interested towards Islamic financial products, however, current study has presented a conceptual framework and after examining these determinants study will explore which factors influencing SMEs intention to adopt Islamic/conventional financial products. 
 Implications/Originality/Value: The study will help the global and Pakistan banking industry (both Islamic and conventional) to look into the areas which are ignored and need attention, which is necessary for the growth of both sector of banking industry as well as for the growth of SMEs. 
 
 
 

THE REGIONAL DIMENSION OF THE SME SECTOR IN ROMANIA

Situated in a permanent process of adaptation and transformation, the SME sector recorded a significant national quantitative and qualitative leap. At the regional level, development of the SME sector is determined by a number of local factors, which distinguish and emphasize the importance of this sector, providing clues that lead to some courses of action that can be considered when developing strategies or development pro grams. Overall, regional disparities in the development of SME sector are relatively small, except for the region of the capital Bucharest-Ilfov, which is distanced from the other regions in particular with respect to the performance achieved.

SMEs Intention towards Use and Adoption of Digital Financial Services


 
 
 
 The purpose of this study is to analyses the SMEs owners and managers intention towards use and adoption of digital financial services in South Punjab, Pakistsan. SMEs are considered key contributors to economic activity, as a key-source of employment, growth, and invention. SMEs perform significant role in the system of national financial regulation all over the world, Jobs creation, and contributing to modernization in the financial regulation are significant exertions to achieve ecological sustainability and more growth in access to finance. Access to finance in emerging countries is one of core issue in development of SME sector as well as obstacle in economic growth. Microfinance institutions are considered a good manifesto to enhance access to inclusive finance as well as stress-free access to finance and financial literacy for SMEs to support economic growth but in Pakistan, to obtain these finances not easy for SMEs sectors. SMEs are unfortunately still struggling due to lack of inclusive finance and financial literacy. Recently financial institution introduced digital financial services at micro level that provide access to financial services to each and every citizen in the country without any restriction. To accomplish the purpose of the research, the data was acquired from the SMEs owners and mangers with a sample of 232 chosen randomly of South Punjab, Pakistan. In this research study, merged two best theories; the theory of planned behavior and technology acceptance model was used to describe their behavior. Multiple statistical tests run to check the normality by using Shapiro-Wilk test, reliability and multicollinearity of the data to test the assumptions of regression and correlation. Finally, the results of this intended study revealed that there is a moderate significant but positive relationship between the SMEs owners and managers intention towards use and adoption of digital financial services. The Government of Pakistan should create finance related awareness program, training, technical institution and make a rules and regulation. Further this study suggests to researchers that focus on internal and as well as external factors of SMEs in Pakistan.
 
 
 

Financial Inclusion for SMEs: Role of Digital Micro-financial Services

SMEs paly major role in poverty reduction and employment generation, therefore experts considered this sector as engine of economic growth. However, access to finance in developing countries is one of major issue in development of SME sector as well as hurdle in economic growth. Financial institutions banking and non-banking shows reluctant behaviour in providing financing to SMEs and the issue is more severe in emerging economies. Bank financing has been found as main source of funds for SMEs in Pakistan, however, to obtain these funds not easy for small and medium firms. Recently digital micro financial services have been introduced by a number of micro finance banks. Current study examines the role of digital micro financial services in enhancing SMEs’ access to finance and thereby enabling a more inclusive financial market for SMEs especially in context of emerging and developing economies. By digging out the existing literature and secondary data, the study discusses that digital financial services have greatly helped owner managers of SMEs in smooth management of their transactions and finances. The study concludes that to strengthen SME sector for economic growth, it is important to further reduce the cost of using digital financial services and increase the financial product portfolio on digital platforms.

Theorizing Servitisation for SME Performance

Introduction: Over the last three decades, servitisation has progressively become a key strategic choice for manufacturing companies. Recognizing the increased emphasis on services with traditional product offerings, the term servitisation refers to the innovative increase in value a company can achieve by creating a viable amalgamation of products and services. Furthermore, their reasons to pursue servitisation could be similar to those of large firms. As such, understanding how servitisation works in SMEs is of tremendous economic importance.Methodology: This paper is a qualitative in nature and aiming to understand the practice of integrating services into products via added value and its importance to SMEs in Malaysia by theorizing the concept of servitisation for SME performance. The clear understanding of the concept could contribute to better development of SME sector in Malaysia. Careful analyses of fifty articles with different themes on servitisation yields some insights on issues prevalent in the matter.Results: Current servitisation research suggests that transitioning to a broader servitisation model for a firm that operates a traditional product model requires a significant amount of assets. However, many SMEs do not have an expendable amount of resources to refit their firms for a progressive servitisation model. Additional elements that act as barriers in SME servitising strategies involve overwhelming competition from wealthier and better-known organizations and an inherently diminished range of influence on the market.Conclusion/- and Recommendations: Absence of servitisation research in SMEs establishes an important area for extended study as SMEs represent the largest margin of all firms. Additionally, SME organizations’ servitisation efforts warrant examination because their access (or lack thereof) to important organizational resources manifest in manners distinct from larger firms.

Gap Analysis and Measurement of Information Technology Readiness for Improvement of Competitive Capabilities to Small and Medium Enterprises in East Java

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The Role of Government in Path-Dependent Development of SME Sector in Ukraine

This article studies evolution of governmental support for SME development from the times of Perestroika until 2013. Guided by institutional theory, the article revises SME development in Ukraine and explains government actions through the prism of path dependence. The analysis is conducted within a matrix logic resuming the data by several periods of time corresponding to changes in the Ukrainian government and being juxtaposed to the main stages of the path dependence analytical framework. The study reveals main trends in governmental support for small business and main challenges remaining nowadays.

Surge in SME surge in economy - an explorative analysis

This study directed towards investigating the possible linkage between the growth in SME sector and economic growth and development. Qualitative and explorative research work was carried out to detect the key underlying variables exist between the constructs. Thorough review of literature reveals quite significant and well-established relationship does exists between SME and Economy. A conceptual networking model has also been established from the data and literature. It also portrayed the relationship in a well-defined way. Further empirical data in few key sectors like employment, value added also exposed intimate and strong relationship between development of SME sector and economic growth and development.

Analysis of Environmental Complexities and the Associated Dynamics for Development of SME Sector in Pakistan

The primary objective of this research is to explore the complex and dynamic behavior of the business environment for small and medium enterprises. While investigating into the complexities and dynamism of the business environment, this research would also attempt to suggest some guidelines for the development and growth of SME sector in Pakistan. Cluster sampling technique has been used for this research. For the purpose of data collection semi structured interviews have be conducted from eighty entrepreneurs from four SME clusters. This research work concludes that the business environment in Pakistan is relatively more complex in nature than other developing countries. To develop the SME sector in Pakistan it is necessary to understand and manage the environmental complexities with in-depth environmental analysis.

SME Lending: A Long Term Commitment towards the Development of Industry

Purpose: The basic purpose is to find out the impacts of SME lending on their development. While conducting the research, a clear objective was established in order to explore the relationship between SME lending and its ultimate impact on the development of SME sector in Bahawalpur, considered as SME Concentrated market of the economy. Design/methodology/approach: The research have been conducted utilizing the actual data with the help of a questionnaire based on the literature studies extensively on SME’s lending and the impact on its development to explore the attributes which leads towards the establishment of SME’s lending in Bahawalpur region. A new dimension is added by conducting research on SME’s lending and the impact on its development in Bahawalpur region, taking sample of 100 respondents from 20 banks and their customers. Findings: Factors abstracted from the market concentration, commercial vs. SME’s lending, issues of SME’s lending, Term of loan, size of enterprises, self employment in SME sector that they are significantly associated with SME’s establishment. Research limitations/ implication: The results found are based on available material being studied. A structured questionnaire has been used to collect data from a sample of 100 SMEs being financed by financial institutions of Bahawalpur region. Practical implications: The financial institutions in Pakistan are needed to take initiative in creating awareness about SME’s lending and providing more effective services to their customers. The results can be generalized on over all SME lending practices in Bahawalpur region. The facilities to cottage industry could be made from the effective use of findings in this paper. Originality/ value: This is one of the very first researches on SME’s lending and the impact on its development conducted in Bahawalpur region and could be very useful for countries adopting SME’S lending. Key words: SME lending, SME’s establishment, Cottage industry, SME Financing, Small Loans.

Business plan as instrument to finance growth and development of SME and the corporative sector of Sandzak

During the past ten years, there were certain changes affecting corporate governance, and development of SME sector. In 2004, the new Law on Enterprises was adopted, which far better regulates matters of company law, including corporate governance. The above situation caused a foundation to start the massive use of the name 'business plan', which is more recent and can be correlated with the arrival of foreign financial institutions and the inflow of foreign capital into the market of the Republic of Serbia. Business plans are often used in the SME sector to find the options for financing the venture. Business plan indicates the obstacles that stand in the venture and suggests alternative routes. A business plan is and must be a necessary part of corporate governance, in which the Board shall conduct the assessment, comparison and adjustment of business plans. And certainly a time will come when correct and realistic business plans will be in the complete function of corporate governance, not only for obtaining funds. The role of business plan (at the level of Sandzak) should be more emphasized to a greater extent in the short term benefit, especially long-term funding from a number of funds, especially the future accession of EU funds.

An Overview of SME Sector and Examination of Banks Lending to SMEs: A Case Study of Jodia Bazaar - Karachi

SMEs are considered as driving force for the economy both in developing as well as in developed countries. In the given economic structure, no one can deny the importance of Small and Medium Enterprises. They are contributing in employment generation, GDP growth, poverty reduction and earning foreign exchange for the country by boosting its exports. Pakistani economy has good potential for the growth of SME sector but still they are unable to get the maximum benefit from this sector. There are multiple reasons behind this, including lack of good policies, current law and order situation as well as political instability in the country. One important problem faced by SMEs is unavailability of finances from the formal sources including banking channels. SBP and other specialized institutions like SME Bank, SMEDA is playing major role in the development of SME sector but still there is a lot of cushion available. Jodia Bazaar is considered as one of the major whole sale markets in Karachi. It consists of thousands of SMEs which includes whole sellers, retailers, importers, exporters, grain traders etc. Due to large potential in this market almost every bank has its presence in this market in the form of branch at Jodia Bazaar. If we look at the credit portfolio of these branches, we will come to know that the contribution of SME portfolio in their major credit portfolio is very small. We have conducted our research to know the factors due to which banks are reluctant to have exposure in the SME sector, especially in the Jodia Bazaar. Data have been collected from fifteen branches of banks located in Jodia Bazaar. Results are analyzed through Pie Charts. This research will be helpful for the Banking professionals, especially associated with credit departments and those who want to enhance the credit portfolio of the Branch in the Small and Medium Enterprises. Results show that Banks in Jodia Bazar are reluctant to take exposure in SME sector due to number of reasons, mainly due to unavailability of correct information, maintenance of proper accounts and availability of trained professionals hired by SMEs. Results also show that some banks have not developed specialized products for SMEs and they are not properly marketing the same.

The growth of the small and medium-sized enterprises in the Polish economy and their influence on the labour market

The small and medium-sized enterprises and self-employment significantly contribute to pro-employment growth in the economy. The main aim of the paper is to describe the determinants of development of SME sector in Poland and to show its significance as a generator of jobs. The article has been structure as follows. Section 2 provides the characteristics and importance of the small and medium-sized enterprises. Section 3 outlines the main provisions of the European Charter for Small Enterprises. Section 4 presents data illustrating SMEs’ growth trends and significance in Poland in the years 2003-2007 by the type of an enterprise, employment, and the share in GDP, foreign trade and investment. Section 5 discusses government’s policies towards utilising the sector’s growth potential for Poland. Section 6 presents major conclusions derived from the earlier discussion.

THE IMPACT OF CLUSTERIZATION ON THE DEVELOPMENT OF SMALL AND MEDIUM‐SIZED ENTERPRISE (SME) SECTOR

The impact of clusterization on the development of SME sector has been analysed in this study. The cooperation of companies at national level and on a global scale is becoming more and more important as a tool of economic development. Companies tend to work together in order to share their competencies, reduce various costs, consolidate limited resources, and hereby increase their productivity, innovativeness, and profitability. It must be emphasized that the role of clusterization is crucial in the development of SME sector, as small and medium‐sized enterprises may benefit from economies of scale and extend the operation limits (size‐related limitations of operation are characteristic of most small businesses). Clusters (and similar forms of interorganizational structures) create the environment for innovation and technological advancement. Therefore, small and medium‐sized enterprises may gain additional benefits that include know‐how, cost‐saving options, innovative solutions, etc. The authors of this scientific study have concluded that the competitiveness of SME sector is closely related to the spread and extent of clusterization processes.