Development Of Small And Medium Scale Enterprises Research Articles

The Development of Small Medium Enterprises and Their Impact on the Ghanaian Economy

The Ghanaian economy is made up of small and medium scale enterprises (SMEs), corporate bodies and multinational companies. They together form the medium through which the economy transacts business activity and grows. The government agenda to make the private sector the engine of growth is mainly driven by the SME sector. The SME sector contributes over 70% of the country’s GDP. SMEs have over the years been very significant to the economic development of most developing countries, especially Ghana. It is a major form of business and a major employer making strong positive impact on the economic growth and GDP in Ghana. This study researches into the operation of the SME development in Ghana, the importance of SME’s to the Ghanaian economy, the challenges facing the sector and makes recommendations as to how to resolve these challenges and the impact to the Ghanaian economy. Data was collected from SMEs from various cross sections of manufacturing, trade, commerce and service industries. The data was collected through interviews, questionnaires, publications and reports. On the average the sector was found to be a major contributor to the GDP, performing very well. Some of the problems faced by the sector were lack of access to credit facility, inefficiencies with their management, inability to capitalize on advanced technology, regulatory and legal constraints. Recommendations are made for the training of the SME owners and managers as well as for the proper registration and structuring of the SME ventures to facilitate access to credit and also meet regulatory requirements.

Exploring the Challenges of Implementation of Enterprise Resource Planning in Small and Medium Enterprises

Small and Medium scale Enterprises (SME) are key players in Sri Lankan economy due to the fact that it contributes 52% to the Gross Domestic Product (National policy Framework for SME Development, 2015) and considered as the back born of the economy. ERP offers the best solution for SMEs without the overheads of the huge investment and management costs that are associated with traditional ERP systems, yet the SME sector faces many challenges in their adoption. Traditional ERP studies have predominantly focused on large organizations, and gaps within in the literature indicate that both vendor and consumer perspectives require more understanding with new technology offerings for SMEs and short of challenges are faced by SMEs in the implementation. However, SMEs enthusiasm to adopt ERP system is low. This study aims to explore the challenges faced by the SME in implementing ERP system. In order to achieve the research objective an exploratory research approach was used. Interviews were executed by means of face-to-face approach. Interview techniques are used to extract understanding, opinions and challenges faced by SMEs on their way to adopt ERP system. Based on the responses, the researcher found six (6) themes that are challenges in adopting ERP in SMEs. However, this study endeavors to explore the challenges of implementing ERP project in selected SMEs and contributes the lack of literature on ERP implementation and provides insight for future study by the researcher and respondents.

Electricity outages and its effect on small and medium scale enterprises (SMEs) in Nigeria

Constant electricity supply enhances smooth running and performances of SMEs. However, electricity outages in Nigeria have been identified as one of the factors hindering SMEs’ performance. This study aimed at exploring the impact of electricity outages on the operations and contributions of SMEs to Nigeria economy. Hence, the study evaluated the impacts of electricity supply on the growth of SMEs in Nigeria. It analysed the hindrances that deficient electricity supply could have on the growth and development of SMEs. Survey method was employed to administer structured questionnaires to 110 SMEs operators in three local government areas of Mainland, Shomolu and Agege in Lagos state, Nigeria. Descriptive statistics was utilised to analyse the collected data. A chi square method was used to test the formulated hypothesis. Findings revealed that electricity outages have significant effects on SMEs in Nigeria. The study recommends among other things that, state and local governments should join hands with federal government in generating electricity to ensure stable electricity supply; cost-benefit back-up generating plant is also recommended to keep business operative.

The gains and pains of small and medium-scale enterprises (SMEs): the way forward for entrepreneurship development in Nigeria

Purpose The purpose of this study is to assess the role of small and medium-scale enterprises (SMEs) as a catalyst to all things good in great economies; however, sadly, Nigeria has been unable to unlock SME development and the many benefits. The paper’s examination revolves around SMEs and entrepreneurial development, employment generation, government policies and financial aid and its availability. With the intention of establishing the relevance of government role in creating vibrant economies via thriving SMEs and its ripple effect on employment generation. Design/methodology/approach The study adopts a survey design, using a questionnaire for data gathering and percentile, confirmatory factor analysis (CFA) and structural equation modelling (SEM) for data analysis. Findings The study established a significant direct relationship between entrepreneurship development and infrastructure development and employment generation. Also, there was a significant direct relationship between government policies and infrastructure development. However, surprisingly, there was an insignificant relationship between government policy and financial aid and accessibility. Practical implications The government’s role in SMEs’ survival and entrepreneurship development is invaluable. The government must live up to their bidding and create an enabling environment to promote SME and entrepreneurship growth. Only this will transform the economy and minimize unemployment to its barest minimum. Originality/value The study’s research model is an interesting contribution to the body of work in SME and entrepreneurship development. The study is also an original attempt at having a good representation of the South-Western part of Nigeria, as research in high impact journals is usually domiciled in one state.

Here Comes the Bribe: The Relationship between Bribery and SME Performance

The development of small and medium scale enterprises (SMEs) is shaped by the environments where they are located, and the institutions in those environments. Governments can have a positive role in shaping SME development. However, corruption exists especially in countries with weak government institutions. Literatures on corruption and firm performance indicate that corruption can either grease or sand business performance and operations. This paper analyzes this relationship using the survey results of 480 SMEs in the National Capital Region and the CALABARZON Region. This study finds evidence that SME profit growth rate, especially among small-sized firms, and revenue growth rate performance have an inverse association with the firms’ extent of perceived corruption around them. The negative and challenging business environment for SMEs may reflect negatively on the macro-level economic performance of the Philippines as SMEs provide a sizable chunk of employment, gross value added and export revenues, among others, for the country. Because of the large contribution of SMEs to the economy, this finding underlines the need for the country to do reforms such as strengthening government institutions and streamlining bureaucracies to stamp out corruption to improve the business environment for SMEs, especially smaller firms.

Effects of Multiple Taxation on the Performance of Small and Medium Scale Business Enterprises in Benue State

This study is on the effects of multiple taxation on the performance of small and medium scale enterprises (SMEs). Over the years, small and medium scale enterprises (SMEs) have been an avenue of job creation and the empowerment of Nigerian citizens, providing about 50% of all jobs in Nigeria and also for local capital formation. However, the mortality rate of these small firms is very high. Among the factors responsible for these untimely close-ups are tax related issues, ranging from multiple taxation to enormous tax burdens. The study therefore examines the effect of multiple taxation on SMEs survival. The study involves a survey research design with a population of 91. The researchers derived their sample size to arrive at 74 and a selfadministered questionnaire was used to collect data. This data was quantitatively analyzed with simple percentages and the research hypotheses were tested with ANOVA. Findings revealed that multiple taxation has negative effect on SMEs’ survival and the relationship between SMEs’ size and its ability to pay taxes is significant. The research therefore, recommends that government should come up with uniform tax policies that will favour the development of SMEs in Nigeria and government should put into consideration the size of SMEs when formulating tax policies.

Challenging the Challenges of Small and Medium Scale Enterprises in Nigeria: New Perspectives

This paper attempted to investigate how to solve the challenges confronting Small and Medium Scale Enterprises (SMEs) in Nigeria. The SMEs, the world over, has been recognized as the engine and catalyst for growth and development for any economy. And despite this unique and important role they play they have continued to experience persistent challenges to their survival in Nigeria.The objectives of the paper are to examine why Small and Medium Scale Enterprises cannot access the needed funds for their operations from the Nigerian financial system, Investigate the factors responsible for lack of adequate human capacity development required for their sound operational and developmental needs and evaluate the various policy initiatives put in place by government to improve the performance of Small and Medium Enterprises.In line with the design of the study, primary data were collected through the use of questionnaires, and regression analysis was used to analyze the data. The findings of this study revealed that there is positive relationship between the growth and development of SMEs and adequate provision of required funding from financial institutions through subsidized funding and credit schemes provided at favourable interests. The paper recommends among other things, that the Central Bank of Nigeria (CBN) should encourage the Nigerian banks to play active part in the funding of Small and Medium Enterprises at reasonable rates, and government should develop a lasting solution to the state of infrastructural deterioration especially, the provision of regular electricity supply amongst others, to enable SMEs bring down their operational cost and contribute their quota to the economy.

Impact of Petroleum on SMEs Growth in Nigeria.

The study undertakes an empirical research on the impact of petroleum on small and medium scale enterprises (SMEs) development in Nigeria. The log linear error correction model was adopted to examine how petroleum price (PP), Imported petroleum (IMP) and domestically produced petroleum (DPP) had impacted on Nigeria’s SMEs. Unit root test was carried out on each of the variables to determine their level of stationarity. They were however found stationary after first difference (that is, they are all integrated of order one (I(1)), then it was safe to proceed with Johansen Cointegration Test. The integrated variables were then used for the regression analysis. The cointegration result showed that the variables used in the model have a long term, or equilibrium relationship between them. It was observed that from the analysis that PP and IMP were found to be statistically insignificant and both had negative relationships with SMEs development Nigeria, while DPP had a positive impact and is statistically significant. Due to the underproduction of the Nigerian petroleum refineries, the government had to resort to importation of the shortfall which also has its cost implications on its sales and distribution. Local manufacturers and farmers had to pay more for transporting their goods and services to the markets. Incessant price hikes of petroleum products have led to crisis and industrial actions led by some pressure groups in Nigeria which has caused distortion in the SMEs activities of Nigeria overtime The study thus recommends that the down-stream oil need to be deregulated to allow private investors come in to build in more refineries so as to produce the petroleum at a relatively lower cost to propel the growth of SMEs in the country.

Impact of Petroleum on Smes Growth in Nigeria

ABSTRACT The study undertakes an empirical research on the impact of petroleum on small and medium scale enterprises (SMEs) development in Nigeria. The log linear error correction model was adopted to examine how petroleum price (PP), Imported petroleum (IMP) and domestically produced petroleum (DPP) had impacted on Nigeria’s SMEs. Unit root test was carried out on each of the variables to determine their level of stationarity. They were however found stationary after first difference (that is, they are all integrated of order one (I(1)), then it was safe to proceed with Johansen Cointegration Test. The integrated variables were then used for the regression analysis. The cointegration result showed that the variables used in the model have a long term, or equilibrium relationship between them. It was observed that from the analysis that PP and IMP were found to be statistically insignificant and both had negative relationships with SMEs development Nigeria, while DPP had a positive impact and is statistically significant. Due to the underproduction of the Nigerian petroleum refineries, the government had to resort to importation of the shortfall which also has its cost implications on its sales and distribution. Local manufacturers and farmers had to pay more for transporting their goods and services to the markets. Incessant price hikes of petroleum products have led to crisis and industrial actions led by some pressure groups in Nigeria which has caused distortion in the SMEs activities of Nigeria overtime The study thus recommends that the down-stream oil need to be deregulated to allow private investors come in to build in more refineries so as to produce the petroleum at a relatively lower cost to propel the growth of SMEs in the country.

Small medium micro enterprise business goals and government support: A South African case study

Small and medium-scale enterprises (SMMEs) form the majority of the enterprises in the South African economy. The South African government has identified the SMME sector as one of the potential enablers to achieve its objectives of improving job creation opportunities, reducing poverty and creating a more equitable distribution of wealth. The aim of this article was to provide a perspective on the success government support initiatives has had on the SMME sector. To achieve this, the study sought to analyse the perceived strengths and weaknesses of government’s national strategy and its institutions tasked with creating an enabling environment for the sector. The study employed a survey research design methodology in which mixed methods were used. The national business strategy employed by government was critically analysed. Empirical data was collected from 282 respondents in order to answer the research question. The results show that the government’s approach has favoured ‘supply-side interventions’ including, providing access to training, credit, mentoring and information to existing and new business. Furthermore, this study has identified the lack of awareness as the primary reason for the under-delivery of the government support initiatives in SMME development. Respondents indicated that they frequently made use of the services of business consultants and external specialists from which they perceived added more value to their respective businesses.

The Impact of Micro Credit Institutions on the Development of Small and Medium Enterprises in Anambra State

This research on the effect of microcredit institutions on the development of small and medium scale enterprises (SMEs) in Anambra State was aimed at determining the impact of microcredit institutions in starting up, survival and growth of SMEs as well as the effect collateral requirements in obtaining loans from microcredit institution in Anambra South and North senatorial district of Anambra State. A sample of 450 respondents was selected for the work using the judgmental and systematic random sampling methods. Although a significant relationship were observed to exist between microcredit institutions and SMEs development, the small degree of association that exist suggests that capital (microcredit) is not the only factor that affect SMEs in the study population. Keyword: SMEs, Microcredit, small scale business, SME financing

Entrepreneurial Orientation and Business Performance of Small and Medium Scale Enterprises of Hambantota District Sri Lanka

Entrepreneurship has played an important role in economic growth, innovation, competitiveness and in poverty alleviation. This study investigated the degree of Entrepreneurial Orientation (EO) of twenty five manufacturing Small and Medium scale Enterprises (SMEs) in Hambantota District, Sri Lanka (HDSL) and the effects of EO dimensions including proactiveness, innovativeness, and risk taking to business performance. Interviews were used as the main instrument for data collection. Qualitative and quantitative techniques were applied for data analysis. Findings showed about 52% of SMEs in HDSL represented moderate level of EO. Proactiveness, innovativeness, risk taking and overall EO were significantly correlated with market share growth. Results further indicated there were positive correlations among proactiveness and EO with business performance. This study could be useful for policy makers to plan their activities towards entrepreneurship development of SMEs in HDSL.

Adoption of information and communication technologies to the development of small and medium scale enterprises (SMEs) in Africa.

This study presents Information and Communication Technology (ICT) as a phenomenon that could assist entrepreneurs in small- and medium- scale enterprises fit into globalization to overcome poverty prevalent in most African countries. The study revealed the roles that ICT has played in the lives of entrepreneurs and how ICT can assist individuals develop competitive small enterprises. The study emphasized that the potential benefits of ICT on the development of SMEs in African countries are boundless, that consumers would have all the power to choose the best prices, given the friction free flow of information, and that businesses would find it easier to stay in touch with their customers and make better informed decisions. The study showed that most African countries’ SMEs are unable to take advantage of economies of scale and capture market opportunities requiring large productive run, standard inputs and consistent standards, often lack training, market intelligence and the capacity for technological innovation. The study also provided strategic framework to enhance the competitiveness of African countries SMEs to assist them compete both in regional and global markets. The study recommended that more research be carried out to develop in depth the strategic framework of information and communication technology for the development of sustainable small- and medium- scale enterprises in Africa. The recommendation is expected to assist the policymakers plan more positively for the general good of the society.

The role of technical institutions in developing a techno-entrepreneurial workforce for sustainable development of SMEs in India

Developing countries such as India are in a state of transition. They are striving to be outward looking global economies rather than inward looking local economies, which will be possible only if small and medium-scale enterprises (SMEs) are encouraged. A wider population base capable of entrepreneurial behaviour needs to be developed. Entrepreneurs are the economic visionaries fuelling economic growth; they are the leaders who will pioneer new products and jobs and create new exports. Today, almost all students prefer wage-employment as a career option. This has been aggravated by our education system, which promotes wage-employment for students rather than self-employment. An engineer, through technical entrepreneurship, can bring a technical revolution that can meet the challenges of the emerging scenario of globalisation and liberalisation with key elements of competition rather than protection. Simultaneously, the increasing unemployment problems of engineering students have forced the Indian policy makers to explore new avenues in the small-scale sector and inculcate students towards self-employment/entrepreneurship in their early careers. For the success of the entrepreneurship development programme, there should be more concentration on vision development of an individual entrepreneur than on a project. As shown in the survey conducted by the author to assess the entrepreneurial characteristics and capabilities of engineering students, the entrepreneurial characteristic is observed to be higher than that of their entrepreneurial capability. Indian industry has so far preferred international collaborations rather than academic or domestic R&D organisations in search of technology. It is essential for the industrial sector to develop indigenous technological capabilities in collaboration with the academic institutions. To develop and transfer technology for SMES in India, effective interaction of academic institutions with this sector will be the first step in this direction.

Technical Efficiency of Small-and Medium-Scale Enterprises: Evidence from a Survey of Enterprises in Tanzania

The significance of small- and medium-scale enterprises (SMEs) is acknowledged worldwide. SMEs form the vanguard of the modern enterprise sector and present the propelling force of economic modernization and growth in developing economies. But it is imperative to examine their efficiency levels in order to formulate appropriate policies for the development of SMEs. In this study, the level of technical efficiency of SMEs in Tanzania has been examined using a Cobb-Douglas stochastic frontier production function. The findings indicate that high levels of technical inefficiency, which reduce their potential output levels significantly, characterize the Tanzanian SMEs. Assisting these firms to improve their technical efficiency through adequate supply of inputs, markets, and credit facilities, and undertaking extensive infrastructural development and training could be important measures.

The role of subcontracting in SME development in Indonesia:: Micro-level evidence from the metalworking and machinery industry

This study investigates whether subcontracting linkages are an important support mechanism for the development of Indonesian small- and medium-scale enterprises (SMEs). It estimates production functions and calculates indices of total factor productivity (TFP) based on micro-level data from 60 metalworking and machinery firms that supply their products to automobile, motorcycle, agricultural machinery and bicycle manufacturers. The estimation results confirm our main hypothesis that inter-firm cooperation through subcontracting ties increases productivity of Indonesian SMEs. This study implies that the situation where subcontracting ties in Indonesia did not function well in supporting SMEs has been changing recently. Better financial access and business continuity are important in facilitating subcontracting transactions, which can provide SMEs with support necessary for improving productivity. A comparison of TFP indices indicates differences in productivity between firm groups. Larger SMEs, non-pribumi SMEs and SMEs producing automotive/motorcycle parts have, in general, higher TFP than their counterparts.

Technology policy and the development of small and medium scale enterprises in contemporary Nigeria

Since 1986, Nigeria's industrialisation policies have continued to be influenced by the structural adjustment programme with its concomitant market-oriented economic policies. There has been the implementation of the privatisation and commercialisation policy while the country's industrial strategy has hinged on the development of small and medium scale enterprises (SME). It is, however, the contention of this paper that, for the development of local technological capabilities in SME, exclusive reliance on market forces is not as effective as a determined and concerted government intervention. Against this thesis, the paper reviews and analyses industrialisation and technology policies in the light of the scope and prospects they afford for revitalising SME in Nigeria. In terms of enactments, industrialisation policies were found to be well focused and have ample scope for the development of SME. Technology policies, on the other hand, lack selectivity and are less focused on the promotion of SME in the country. The conclusion is reached that the design and implementation of technology policy have to be reviewed and aligned with the country's industrialisation policies. Specifically, in policy formulation and implementation, concerted efforts are needed to generate, and at the same time create, effective social demand for science and technology.