Financial Performance Of SMEs Research Articles

Human resource competencies, supply chain management, and financial performance

This research was conducted on SMEs in Indonesia, by prioritizing the local wisdom of the Indonesian nation as a tropical, agrarian country, with SMEs owners who process fruits and vegetables into snacks as respondents. The study involved 243 respondents, to determine the partial and simultaneous influence of human resource competences and supply chain management on financial performance. The reason for doing this research is because some of the research that has been done by previous researchers still discusses this on corporate and not on SMEs. However, market conditions have changed. SMEs need to be managed professionally, by minimizing expenses to maximize revenue, taking into account risk, resource capabilities, in flexible ways as well as low-cost. The results showed that there was a significant influence on the financial performance of SMEs with the presence of human resource competences and supply chain management either partially or simultaneously.

The Impact of Managerial competencies on Financial performance of SME’s with mediating role of Competitive Advantage

The study aims to examine the impact of managerial competencies on the financial performance of SMEs operating in emerging economy Pakistan with mediating role of competitive advantage. This research is quantitative. Cross-sectional data were collected from 149 registered Small and Medium Enterprises operating in Islamabad through a structured questionnaire. The findings of this study displayed that managerial competencies significantly contribute to the financial performance of SMEs. Furthermore, competitive advantage plays a partial mediating role between the nexus of managerial competencies and the financial performance of SMEs. The result of the study suggests that managerial skills and knowledge play a Significant role in SMEs' financial performance which is advantageous for owners and managers of SMEs to gain a competitive edge. The result of this study is equally beneficial for CEOs, owners, and managers of SMEs who are busy configuring financial performance.

The Impact of Resource Efficiency Actions on Firm Performance, Moderating Role of Eco-Investment and Production Cost

The relationship of resource efficiency actions and firm performance has been analyzed by different researchers where the large firms have, all the times, been considered mostly however the small firms have been neglected generally. The prior studies concluded with no common consensus to comprehend the direction of this relationship. In this study, the primary intention is to examine the impact of resource efficiency actions on financial performance of SMEs. The cross section quantitative data of ninety firms has been gathered for the year 2019 by questionnaires. The dependent variable is firm performance and seven resource efficiency actions of saving water, saving energy, renewable energy, saving material, minimizing waste and selling scrap material to another company, are the independent variables whereas the eco-investment and production cost are the moderating variables. The correlation techniques and ordinal regression analysis have been implemented. This study concludes a negative and insignificant relationship between resource efficiency actions and financial performance of small firms for the short run. The eco-investment negatively but significantly whereas the production cost positively and significantly moderates the link of resource efficiency actions and firm performance. The results can vary if the subject matter is analyzed by accumulating the panel data and if other subdivisions of this sector are also included to extend the sample size.

The impact of the COVID-19 pandemic on selected areas of a management system in SMEs

The current pandemic, that has wider economic and social impacts, will put to the test all enterprises, which will be forced to search for new survival strategies and to create existential prognoses of business operations during great economic and social uncertainty and new crises whose impacts are hard to predict. This fact motivated the team of authors to realise the study that aims at researching and quantifying the impacts of the pandemic COVID-19 on selected areas of management in SMEs in the Czech Republic (CR) and the Slovak Republic (SR). The research sample consisted of 1502 SMEs, 822 SMEs before the pandemic, 680 SMEs during the pandemic, 814 from CR, and 688 from SR. Attitudes between SMEs according to nationality and period of research were verified with a chi-squared test and Kruskal-Wallis tests. The results of both countries confirmed that the pandemic has a negative impact on the financial performance of SMEs. The government economic measures may help the enterprises to recover, said 40.0% of Czech entrepreneurs, but only 30% of Slovak entrepreneurs. However, the entrepreneurs in SMEs equally perceive other aspects of corporate governance and business risk management during the pandemic.

Company accounts preparation and financial performance of small & medium scale enterprises in Nigeria

The importance of keeping company accounts is to promote the growth evaluate the performance ofsmall and medium scale enterprises (SMEs). Many business entities collapse few years after their incorporationdue to poor management arising from weak accounting structure. This study, therefore, examinesthe relationship between company accounts preparation and the financial performance of SMEs in Nigeria.The study adopts a survey research design. The sample size of 380 respondents was drawn from 20selected SMEs using a purposive sampling technique. Primary data was collected by administering questionnaireto SMEs operators. Multiple Regression model and correlation analysis were employed to analyzethe data. The results of data analysis confirm a strong positive relationship between the companyaccounts preparation and the financial performance of SMEs in Nigeria. This was established from thep-value of 0.00 which is less than 0.01 significant level (0.00 < 0.01). This study concludes that, theadequate company accounts preparation will reflect financial performance of SMEs in Nigeria. This studydiscovers that some SMEs operators in Nigeria hired unskilled accounting personnel making it difficultfor them to prepare reliable annual accounts and reports. This study, therefore, recommends that theSMEs operators in Nigeria should be maintaining proper accounting records of their operations and hireexperienced accounting personnel. Findings from this study will gear up the SMEs operators to appreciatethe need to adequately prepare reliable company accounts that will reflect the financial performanceof their businesses.Key words: Company accounts preparation, financial performance, SMEs.

Synergy between Small to Medium Enterprises and Financial Performance: A Case Study of Bulawayo the Former Industrial Hub of Zimbabwe

The synergy between SMEs and Economic performance has for long been acknowledged by governments but not sufficiently researched on how they contribute to economic growth. The decision to conduct this research was prompted by the desire to fill in knowledge gap manifesting among policy makers, entrepreneurs and academics on the extent to which the symbiotic relationship between SMEs financial performance predicate economic performance. Questions such as what is finance for SMEs and what is being used to secure finance by Small Ventures were elucidated. Mixed approach as well as primary source of information was used which was the major highlight on how finance influence venture operation when collecting data. Descriptive statistics were used to determine distribution of economic-performance variables and test for independence of association of variables that were assessed Results indicated that development and survival of most SMEs hinges on funding. Furthermore, SMEs performance in terms of investment and returns rely heavily on finance. There was an interrelationship on how economic performance stimulates development and productivity of Small Ventures and vice versa. It was recommended that decision makers and relevant ministries introduce necessary policy that understand, collaborate, and link SMEs and financial performance to promote economic growth. Further the research encouraged the need for a standalone financial policy be designed towards SMEs growth needs and address market imperfections.

The impact of strategic competitive innovation on the financial performance of SMEs during COVID-19 pandemic period

PurposeThe purpose of this paper is to reveal the impact of strategic competitive innovation types on the financial performance of SMEs during a very critical period: the COVID-19 pandemic. Four strategic competitive innovation types are considered in this study: marketing innovation, organizational innovation, product innovation and processes innovation.Design/methodology/approachTo examine empirically the relationship between strategic competitiveness and financial performance, data were collected from a sample of 426 Lebanese SMEs belonging to seven different sectors.FindingsThe empirical findings of principle component analysis model (PCA) and multiple regression model (MR) reveal that the ability to innovate is essential to an SME’s survival during a crisis. The results of this study confirm the existence of a positive impact of marketing innovation and processes innovation on the financial performance of SMEs during the COVID-19 pandemic.Practical implicationsMoreover, results suggest that, in Lebanese SMEs, product innovation and organizational innovation do not have any impact on the financial performance during the pandemic period.Originality/valueThis research focused on strategic competitive innovation as a broadly considered essential condition for the survival of SMEs during the COVID-19 crises.

AGRIPRENEUR SUSTAINABILITY STRATEGIES AND FINANCIAL PERFORMANCE OF SMALL-SCALE FARMERS IN UASIN-GISHU COUNTY, KENYA

Purpose: The purpose of this study was to examine agripreneur sustainability strategies and financial performance of SMEs in Uasin Gishu County with a specific interest of small-scale farmers in Uasin Gishu County.
 Materials and Methods: A descriptive survey research design was adopted in the study. The target population comprised of 1,397 small scale farmers in Uasin-Gishu County. A sample size of 140 respondents was selected using simple random sampling technique. Questionnaire was the key data collection instrument. The collected data was analyzed using quantitative and qualitative approaches of analysis. Statistical Package for Social Services version 21 was used to summarize the quantitative data into frequencies and percentages. The summarized information was presented using figures, tables and pie charts.
 Results: From the analysis, the following key findings were made: there is a strong positive association between financial performance and innovation (r=.219*), pro-activeness (r=.505), risk taking (.256), and networking (r=.410). The coefficient of determination indicates that 32.7% of variation of financial performance is explained by agripreneurship sustainability strategies such as innovation, pro-activeness, risk-taking and networking. It is concluded that innovation, pro-activeness, risk-taking and networking affect the financial performance of Small scale farmers in Uasin Gishu County.
 Unique contribution to theory, practice and policy: The study recommends that there is a need for regular training opportunities to be provided to the small scale farmers. Organizations in the agricultural sector and government ministries should focus on training farmers on entrepreneurship as a sustainable course for the business growth. Education policies in the country need to be reviewed to integrate agripreneurship as a course and more resource provided to encourage it among students in learning institutions. There is also a need for agricultural seminars to be organized within the county for the small scale farmers. There is need for further research to be conducted to assess the other factors that may be affecting the financial performance of small scale farmers.

Financial Inclusion and Poverty Alleviation in Kenya: Effects of Mobile Loan Interest Rates on the Financial Performance of SMEs in Urban Informal Settlements

The aim of this study is to assess the effect of interest rates on the financial performance of SMEs in urban informal settlements in Kenya. This study adopts the descriptive survey design. Data were collected from 120 SMEs in the 6 wards of Mathare Sub-County. Data was collected using semi-structured questionnaires. It was analysed using descriptive and inferential statistics. The findings show that low-interest rates could influence the propensity of SMEs to apply for these loans. The ability to pay mobile loans without problems due to low interest rates enhanced the performance of the respondents’ businesses. This goes on to contribute to poverty alleviation in urban informal settlements through enhanced access to capital; one of the goals of the World Bank. This has further ripple effects since it can contribute to income diversification for the inhabitants of poor urban areas. The following recommendations were made. The government should also reduce interest rates to lower the cost of mobile phone interests as well as the interest rates of other loan products. Mobile loan lenders should also ensure that their loan products are affordable for the urban poor.

Mobile Loans as Financing Options in Kenya and the Financial Performance of SMEs in Low Income Areas in Nairobi County

This study sets out to examine the effect of loan accessibility on the financial performance of SMEs in urban informal settlements in Kenya. Based on the descriptive survey design, data were collected from 120 SMEs in the 6 wards of Mathare Sub-County using semi-structured questionnaires. It was analysed using descriptive and inferential statistics. The findings show that all the loan accessibility had a significant and positive relationship with the financial performance of SMEs. In this regard, enhancing loan accessibility contributed to the financial performance of SMEs in urban areas. Financial inclusion among SMEs in urban areas was also enhanced through mobile loans. This could go on to enhance living standards among the inhabitants of urban informal settlements as envisaged by World Bank. In this regard, several recommendations were made. Mobile loan providers should market their mobile loan products to make them visible since only 4, Safaricom-Fuliza, M-Shwari, Tala, and KCB-Mpesa were the most used. Civil society organizations in collaboration with mobile loan providers should also carry out capacity building campaigns among SMEs in informal settlements. This would lead to enhanced visibility and accessibility of these mobile loans among the inhabitants of urban informal settlements.

Short-Selling and Financial Performance of SMEs in China: The Mediating Role of CSR Performance

The aim of this study is to examine the effect of short-selling deregulation on the financial performance of SMEs in China. The external governance role of short-selling is also tested by adopting corporate social responsibility (CSR) performance as the mediating effect. This study investigates a panel data analysis with a sample of 5038 firm-years of SMEs listed in Shenzhen Stock Exchange from 2010 to 2019. The PSM-DID method is adopted in this study to alleviate self-selection and endogenous problems to observe the comparable pure effect of short-selling deregulation, while the mediation test is conducted based on Baron and Kenny’s model. The finding of this study showed that the existence of short-selling could enhance firm financial performance and the mediating effect of CSR performance position in their relationship. In addition, the further analysis revealed that the mediating effect of CSR is more pronounced for family businesses and firms with high real short-selling threats. The robust test of alternative measurements is conducted and valid. This study provides insights for policymakers to consider further short-selling ban lifting and corporate executives to practice more CSR activities to improve the financial performance. Limitations and further implications of this study are also discussed.

Family involvement and financial performance in SMEs: evidence from Italy

Family involvement and financial performance in SMEs: evidence from Italy

Financial literacy training and micro insurance on the financial performance of SMEs in the Sekondi-Takoradi Metropolis, Ghana

This research examines the effect of financial literacy training and micro insurance on the financial performance of Small and Medium Enterprises in the Sekondi-Takoradi Metropolis of Ghana. This study aims (i)to determine the effect of financial literacy training on the financial performance of SMEs, (ii) to establish the effect of microinsurance on the financial performance of SMEs; (iii) and to determine the moderating effect of government regulations on the relationship between financial literacy training, micro-insurance and the financial performance of SMEs. The study was based on the financial intermediation theory and Schumpeter’s theory of innovation. The study adopted an explanatory research design, using a sample size of 260 SMEs in the Sekondi-Takoradi metropolis, Ghana. A structured questionnaire was used to collect data on financial literacy training, micro insurance, financial performance, and government regulations from SME owners and microfinance institutions. Analysis of the data collected revealed that both financial literacy training and micro-insurance had a positive and significant effect on the financial performance of SMEs. The study recommends that the management of microfinance institutions that provide financial literacy training and micro-insurance should undertake a survey on the needs of SMEs and the specific challenges they face in accessing microfinance services.

Strategic Orientation and Performance of Small Businesses in South Africa

Motivation: Most studies on strategic orientation have focused on financial performance while neglecting social and environmental performance. In this era of sustainable development, the performance of SMEs is better measured using the triple bottom line approach (financial, social and environmental). Studies that examine the effect of strategic orientation on the sustainable performance of SMEs are scarce. Novelty: The aim of the study is to explore the impact of strategic orientation on the sustainable performance of SMEs. While extant studies have explored the effect of strategic orientation on the financial performance of SMEs, this study used the sustainable measure of performance that included financial, social and environmental indicators. Methodology and Methods: The study followed the quantitative research design and a self-administered questionnaire was employed during the data collection process. Data was collected from one hundred and forty SME owners in a cross-sectional survey. The participants of this study were in the retail, service and manufacturing sectors. Data and Empirical Analysis: The Pearson correlation and regression were used for analysis. The Pearson correlation results indicated a positive correlation between strategic orientation and sustainable performance, while the regression analysis showed that strategic orientation has a positive impact on the sustainable performance of SMEs. Policy Considerations: South Africa is a signatory to the Paris Agreement on Climate Change and the United Nations’ Sustainable Development goals. The sustainable performance of SMEs can help to achieve these goals. The findings of this study can help small business owners to continuously acquire strategic orientation education for themselves and their employees. Agencies that support small businesses should organise seminars to train and educate SME owners on strategic orientation and sustainable performance.

The Conceptual Framework of SMEs Financial Success in Sultanate of Oman

SMEs financial success contributes to the nation`s GDP and helps in jobs creation, while SMEs financial failure will lead to issues, such as low job creation and Non-Performing Loans. From the perspective of the Sultanate of Oman, the SMEs financial performance is one of the government major concerns due to its significance and implications on the future of the national economy. Thus, it is worthwhile to assess the SMEs financial literacy and entrepreneurs' competencies (EC) as enablers of SMEs financial performance betterment. However, review of the literature and the practical evidence available give the impression that each sub-dimensions of entrepreneur competencies (EC) does not affect identically on SMEs financial performance. Therefore, it has become important to understand the financial literacy and entrepreneur competencies (EC) sub-dimensions effect on SMEs financial performance so that their significance and importance can be identified. This study aims to provide empirical evidence about the effect of financial literacy and each sub-dimensions of entrepreneur competencies (EC) on SMEs financial performance in the Sultanate of Oman. Besides, this research tends to examine the role of firm resources availability and government support as moderators. Resource-Based View Theory (RBV) will be adopted to extend the existing literature on SMEs financial performance determinants from SMEs entrepreneurial perspective. As research novelty and theoretical contribution, this research study's the interactions of financial literacy and each sub-dimensions of entrepreneur competencies (EC) with firm resources availability and government support, as moderators. The convenience sampling method will be used with SMEs sample size of 200 and 300 questionnaires will be distributed to SMEs founders/owners in Sultanate of Oman. The structural equation modelling (SEM) through partial least square (PLS) approach will be used to test the study hypotheses. The present research findings are expected to broader the picture of entrepreneur competencies (EC) and SMEs performance researches by revealing the financial literacy and each sub-dimensions of entrepreneur competencies (EC) effect on SMEs financial performance. Further, it may confirm the moderating role of firm resources availability and government support on SMEs financial performance.

Impact of Accounting Function Outsourcing on SMEs Financial Performance and Efficiency: Evidences from some selected Manufacturing Subsectors in Nigeria

Impact of Accounting Function Outsourcing on SMEs Financial Performance and Efficiency: Evidences from some selected Manufacturing Subsectors in Nigeria

Penerapan Penyajian Laporan Keuangan Berdasarkan SAK-ETAP Untuk Mengetahui Kinerja Keuangan UMKM Toko Angka Wijaya

Small and Medium Micro Enterprises are businesses that have an important role in the economy in Indonesia because micro, small and medium enterprises aim to grow and develop their business in order to build a national economy. SMEs are also able to open new jobs for domestic workers,SMEs provide income for the country in the form of foreign exchange. To get a better UMKM, so that SMEs can compete with large business institutions in terms of economy and empowerment, SMES actors must be aware of the importance of applying financial statements. The purpose of this study was to find out how the application of financial statements based on SAK-ETAP on SMEs and how financial performance in SMEs was implemented. The author conducts research at the Wijaya Figures Store UMKM located on Jl. Endang Sumawijaya Kampung Sindang Barang, Bogor Regency. This research method uses a qualitative descriptive method. The results of the Angka Wijaya SMES research did not apply financial statement. This is because the SMES owner Angka Wijaya do not understand the financial statements based on SAK ETAP. During 2018 total assets, liability+equitycan be generated in the amount of IDR 386,558,000, profit of IDR 120,518,000 equity of IDR 366,229,000 and total net cash flow of IDR 261,238,000. The results of the wijaya store SMEs performance are calculated using profitability ratios based on profit from good sales and ussing on asset, meaning that the angka wijaya UMKMs are good in terms of sales and efficient in using assets, while SMES performance in capital usage is not good because of UMKM Angka wijaya is less efficient in capital
 
 Keywords: application of financial statement presentation based on sak-etap to know wijaya's financial performance in figures shop smes

The Conceptual Framework of SMEs Financial Success in Sultanate of Oman

SMEs financial success contributes to the nation`s GDP and helps in jobs creation, while SMEs financial failure will lead to issues, such as low job creation and Non-Performing Loans. From the perspective of the Sultanate of Oman, the SMEs financial performance is one of the government major concerns due to its significance and implications on the future of the national economy. Thus, it is worthwhile to assess the SMEs financial literacy and entrepreneurs' competencies (EC) as enablers of SMEs financial performance betterment. However, review of the literature and the practical evidence available give the impression that each sub-dimensions of entrepreneur competencies (EC) does not affect identically on SMEs financial performance. Therefore, it has become important to understand the financial literacy and entrepreneur competencies (EC) sub-dimensions effect on SMEs financial performance so that their significance and importance can be identified. This study aims to provide empirical evidence about the effect of financial literacy and each sub-dimensions of entrepreneur competencies (EC) on SMEs financial performance in the Sultanate of Oman. Besides, this research tends to examine the role of firm resources availability and government support as moderators. Resource-Based View Theory (RBV) will be adopted to extend the existing literature on SMEs financial performance determinants from SMEs entrepreneurial perspective. As research novelty and theoretical contribution, this research study's the interactions of financial literacy and each sub-dimensions of entrepreneur competencies (EC) with firm resources availability and government support, as moderators. The convenience sampling method will be used with SMEs sample size of 200 and 300 questionnaires will be distributed to SMEs founders/owners in Sultanate of Oman. The structural equation modelling (SEM) through partial least square (PLS) approach will be used to test the study hypotheses. The present research findings are expected to broader the picture of entrepreneur competencies (EC) and SMEs performance researches by revealing the financial literacy and each sub-dimensions of entrepreneur competencies (EC) effect on SMEs financial performance. Further, it may confirm the moderating role of firm resources availability and government support on SMEs financial performance.

Corporate social responsibility, innovation capability and firm performance: evidence from SME

PurposeThe purpose of this paper is to examine corporate social responsibility (CSR) and its effect on small and medium enterprises’ (SMEs) innovation capability and financial performance from the perspective of a developing country. It also aims to explore the role of innovation capability as a mediating factor in the linkage between CSR and SMEs’ financial performance.Design/methodology/approachA questionnaire was distributed among managers/owners of the sampled companies. Using a data set of 402 Eritrean firms and partial least squares structural equation modeling, direct and mediating effects were tested.FindingsThe result reveals that CSR has a positive and significant effect on the financial performance and innovation capability of SEMs. Besides, innovation capability has a positive and significant effect on the business performance of SMEs. The result also supports a partial mediation effect of innovation capability on the association between CSR and firm performance.Practical implicationsThe findings from this research could enhance the awareness of the entrepreneurs, researchers and policymakers on CSR-SMEs’ relationship and help understand the importance of CSR as a crucial driver mechanism for companies to become more innovative and competitive.Originality/valueBy empirically examining the relationship between CSR, innovation capability and performance in SMEs, this study contributes to the ongoing scholarly discussion on the linkage between CSR and financial performance. Also, to the best of the authors’ knowledge, no other study investigated the mediating role of innovation capability on the link between CSR activities and firms’ financial performance in SMEs from a developing country perspective, making substantial contributions to research in terms of theory, practice and policy.

Microfinance Credit Accessibility and Financial Performance of Small and Medium Enterprises in Machakos County, Kenya

SMEs in Machakos County have been characterized by poor financial performance which has been linked to financial access. Financial access is one of the keys that drive the development of SME in the country, particularly access to bank financing since banking sector plays a key role in serving this segment. This study specifically sought to determine the influence of collateral security, loan-income ratio and geographical branch penetration on financial performance of SMEs. Study adopted census survey due to small population size. Respondents were supplied with semi-structured questionnaires with aim of getting their views regarding financial accessibility and SME performance. Findings of the study indicated that collateral security, loan-income ratio, and geographical branch penetration has a significant positive effect on financial performance in Machakos County, Kenya. This research recommends that SME’s should improve their core capital, strengthen their financial management practices, foster financial innovation, and literacy within firms.