SME Owners Research Articles

La influencia del dinero negro en las pymes. Puebla, México

The objective of this research is to understand the influence of black money on SMEs, to outline solutions to prevent and combat these illegal practices contributing to the strengthening of business responsibility and ethics. The methodology used is qualitative, based on the hypothetical deductive method applied in the field: the capital of the state of Puebla. The object of study is the influence of black money on SMEs. We consider black money to be money obtained illegally (drug trafficking, floor collection, clandestine marketing of fuels or any illicit activity) that comes from a legitimate source with the aim of “laundering” it, that is, disguising large amounts of cash as legal, which allows criminals to maintain control over their profits. The main finding is: 81% of SME owners are prone to use black money for the operation of their business.

THE IMPACT OF MICRO FINANCE BANK ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN KANO METROPOLITAN

The main objective of the study was to determine the effect of microfinance services on the performance of Small and medium enterprises in Kano metropolis, Nigeria. The populations of the study consist of the 79328 SMEs in Kano metropolis according to Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the national database of all registered SMEs in Kano state as released in the 2021 report with a sample size of 379 respondents. Valid responses were analyzed using SPSS version 20 applications. The study concluded that of saving service, loan service and training service have a positive and significant effect on the performance of SMEs in Kano metropolis. The study recommended that Microfinance Institutions should sensitize SMEs owners on the benefits of saving, they should revise the loan terms given to their borrowers and ensure that they are favorable for accessing loans and also train SMEs in accessing, borrowing and utilization of loans received from MFIs.

Determinants Of Artificial Intelligence Adoption In Accounting Among Malaysia Small And Medium-Sized Enterprises

Malaysia Small and Medium-Sized Enterprises (MSMEs) are still in the early phases of adopting artificial intelligence (AI) to transform manual or conventional processes into ones that are supported by AI technology. Most MSMEs have yet to fully grasp the essence of digitalization as a general movement in corporate strategy and work processes to improve decision-making, boost efficiency, and discover untapped possibilities. The purpose of this research is to examine the determinants of AI adoption in accounting among MSMEs. The independent variables are perceived ease of use, management support, organizational readiness, government support, and external pressure. The dependent variable is AI adoption in accounting among MSMEs. This research applied a quantitative method by using a questionnaire consisting of 24 questions. The study used a convenience sampling method, with a sample size of 200 respondents from MSMEs. A total of 150 samples are valid. The collected data was analyzed using SPSS. The collected information was assessed using demographic descriptive analysis, data descriptive analysis, normality test, validity analysis, reliability test, correlation analysis, and regression analysis. The findings indicated that the adoption of AI in accounting among MSMEs is positively influenced by perceived ease of use, management support, organizational readiness, government support, and external pressure. The results and suggestions will be advantageous for SMEs looking to adopt AI in their accounting functions. Additionally, this research proposes a methodology and framework to assist SMEs owners and management in comprehending the determinants that drive significant AI adoption in accounting.

Probability of Detection and Value Added Tax Compliance among Small and Medium Enterprises in Westlands Sub County, Nairobi, Kenya: Moderating Effect of Tax Service Quality

Purpose: Value-added tax compliance has remained a challenge, especially when it comes to SMEs operating in Kenya. The high level of informality of this sector provides an incentive for most of the SMEs to evade payment of VAT, a situation that has constrained the amount of tax revenues available to finance fiscal budget. This study aimed to determine the moderating role of tax service quality on the relationship between probability of detection and value added tax compliance among small and medium enterprises in Westlands Sub County, Nairobi, Kenya. Methodology: The study adopted an explanatory design targeting 751 SMEs operating in Westlands Sub- County, Nairobi, Kenya as registered by Nairobi City County. The sample frame was the list of SMEs in Westlands Sub- County that is available in Nairobi City County. The sample size was 261 owners of the said SMEs who were stratified into four categories based on the nature of undertaking of their business and a representative sample from each of these categories was drawn. Gathering of information was by use of a questionnaire. To analyze the collected information, descriptive statistics like means and standard deviations as well as multiple regression analysis was adopted. Results: Regression of coefficients showed that probability of detection had a positive and significant effect on VAT compliance of SMEs (β=0.358, p=0.000). The findings also revealed that tax service quality moderates the relationship between probability of detection and value added tax compliance among small and medium enterprises (β= 0.086, ρ<0.05). Conclusion: The study concluded that probability of detection had a positive and significant effect on VAT compliance of SMEs. In addition, the study concluded that tax service quality moderate the relationship between probability of detection, on value added tax compliance among small and medium enterprises in Westlands Sub County, Nairobi, Kenya. KRA should increase the rate probability of audit detection by coming up with new mechanisms of audit detection thus enhancing VAT compliance of VAT amongst the SMEs. The government should strive to provide SME owners in Westlands Sub County, Nairobi, with services that are of high standards for example at the tax stations as clearly stated in the corporate plan to reduce the need for spending costs to hire skilled persons such as tax consultants.

The Influence of Financial Literacy and Financial Behavior on the Financial Performance of SMEs: A Regression Analysis Study in Indonesia

The method used in this research is the regression analysis method with the variables used, namely Financial Literacy (X1), Financial Behavior (X2) on Financial Performance (Y). This research uses quantitative methods and uses a sample of 118 respondents who are SME owners spread throughout Indonesia. The research uses SPSS software to assist in data processing. From the results of this research it can be concluded that the t test results obtained a significant value for the financial literacy variable of 0.019 and a regression coefficient value of 0.209. The significance value <0.05 and the positive regression coefficient value indicate that financial literacy has a positive effect on financial performance . The results of the t test obtained a significant value for the financial behavior variable of 0.005 and a regression coefficient value of 0.200. The significance value <0.05 and the positive regression coefficient value indicate that financial behavior has a positive effect on financial performance. These findings also show that financial literacy has a positive effect on the performance of SMEs and financial behavior has a positive effect on the financial performance of SMEs in Indonesia

Examining Barriers to SME’s Access to finance: A Qualitative Review of Credit Guarantees in Malawi

The study examines the implementation of credit guarantees and how their barriers affect small and medium enterprises' (SMEs) access to finance in Malawi. The study reviews widely existing literature from academic research, policy frameworks, and reports from governmental and nongovernmental bodies. Additionally, the study uses primary data collection methods, in which interview and survey techniques are applied to cover the whole spectrum of stakeholders: SME owners, financial institutions, government functionaries, and development partners. This study uses a qualitative approach to examining how credit guarantees affect small businesses' ability to access capital and how well they do after it. Qualitative techniques include thematic coding of interview transcripts and policy documents, and quantitative techniques include using statistical tools. In so doing, the paper brings to light credit guarantees, which are essential in broadening the financial horizons of SMEs in Malawi. Major barriers to accessing finance include a lack of collateral, poor credit history, and exorbitant interest rates which become stumbling blocks for SMEs to secure loans from mainstream financial institutions. It further identifies the critical role of government policies and programs in supporting SMEs' financial inclusivity and offers measures to enhance credit guarantee mechanisms' effectiveness.

Role of Digital Marketing and Digital Transformation in the SME's Financial Performance

The aim of this research is to analyze the relationship between digital marketing and financial performance, analyze the relationship between digital transformation and financial performance and analyze the relationship between digital transformation and digital marketing. This research method is quantitative through surveys, the research population is SMEs owners in Indonesia. The results of data analysis show that digital marketing has a positive and significant relationship to financial performance, digital transformation has a positive and significant relationship to financial performance, digital transformation has a positive and significant relationship to digital marketing. The results of the mediation effect test on the influence of digital marketing on financial performance through digital transformation mediation can be concluded that digital transformation is full mediation on the influence of digital marketing on financial performance.

Determinants and Extent of Tax Compliance among SMEs in Arusha City Council, Tanzania

Taxes have been a nourishing commodity in generating revenues liable for financing governments’ budgets all over the world. This being the fact, this study examined the determinants and extent of tax compliance in SMEs in Arusha City Council which was the specific objective of this study. This was a cross-sectional study which employed a double Hurdle regression model to analyze primary data collected from a sample of 100 SMEs’ owners obtained by simple random sampling to represent the entire population of SMEs owners via questionnaire and analyzed with STATA software version 17. Using the economic deterrence theory to guide the analysis of this study, the analysis found that Male entrepreneurs dominate the SME sector, SME owners understand tax regulations and undergo frequent tax audits. Further, the findings revealed that privately owned SMEs, primarily ran by persons in their mid-30s are flexible with an average workforce of nine employees. Furthermore, SMEs were found to generate feasible profits and fulfill tax compulsions by paying an average tax rate. Moreover, the double hurdle regression model shown that age and profits have negative effect on tax payments, and higher household size of SMEs owners are associated with higher tax payments. Additionally, publicly owned enterprises positively comply with tax. Therefore, given these findings, this study recommends to policymakers to streamline tax procedures and develop a platform to discuss tax rates with tax payers before implementing the planned tax obligations.

TRANSFORMATIVE BUSINESS GROWTH STAGE MODEL TO FACE UNCERTAINTY

The business landscape was characterized by rapid change, intense competition, and various substitute products. These factors shortened business life cycles and hindered business growth. Therefore, there was a need for a more appropriate model that could suit the current condition. The study aimed to develop a transformative Growth Stage Model (GSM) effectively adapted to modern challenges and uncertainty. This qualitative approach involved inductive theory building with seven case studies of SME owners in Yogjakarta and Central Java. Developed models, patterns, and interview themes were built, including resilience, business performance, and leadership for the early growth, growth, and decline stages. In addition, these patterns and themes were used to develop three stages of transformative GSM known as GSM 4.0.

Adoption of Business Intelligence Among Iraqi SMEs Culture: Impact of Technology Acceptance Model, Information Quality, And Organizational Readiness

Effective use of business intelligence has become essential for small and medium-sized organizations (SMEs) in the era of digitalization due to the introduction of new technologies. Therefore, this study aims to measure the influence of the Technology Acceptance Model (TAM) and other factors, for example, the quality of information, organization readiness and technology infrastructure, on business intelligence. A quantitative research methodology was used, with a sample size of 281 participants who were owners, managers and information system staff in Iraqi SMEs who had experience using business intelligence. The findings of this study indicated that the quality of information has a significant impact on perceived usefulness (PU) and perceived ease of use (PEOU). Similarly, PU, PEOU, organization readiness and technology infrastructure positively and significantly impact business intelligence adoption. This study offers a comprehensive analysis of the crucial aspects that contribute to the successful deployment of business intelligence, thereby influencing the outcomes of SMEs. The results of this study will help entrepreneurs, SME owners managers, and academics develop a business intelligence system that can enhance overall organizational efficiency in a dynamic economic setting. Putting in place a good business intelligence system will help managers make better decisions, boost economic growth for businesses, support new ideas in businesses, and improve their overall performance and output.

Motivating factors affecting formalization of small informal enterprises: Evidence from an emerging economy

AbstractThis study investigates the motivating factors behind the formalization of small informal enterprises in Bangladesh, an emerging economy, employing the lens of institutional theory. It emphasizes how regulatory structures, normative pressures, and cognitive understandings shape the decisions of SME owners in emerging economies like Bangladesh. A significant portion of small enterprises in Bangladesh remain informal, leading to concerns over economic development, productivity, and efficiency. Informal enterprises often face challenges such as limited access to finance, market entry barriers, and regulatory hurdles. Recognizing the need for formalization, this research aims to understand the drivers behind this transition. A questionnaire survey of 304 informal enterprises reveals that streamlined regulatory systems, particularly one‐stop solutions and simplified registration processes, are primary motivators for formalization. Additionally, flexible collateral requirements for financing and lower levels of technological adoption also significantly influence this transition. These findings contribute to the academic discourse on informal businesses in emerging economies and provide key policy implications for fostering formalization through targeted strategies and policies.

The relationship between SME financial sustainability and owners’ financial well-being in South Africa

This study examines the relationship between financial sustainability and the financial well-being of SME owners in Durban, South Africa. Utilising a quantitative research design, data were gathered through close-ended surveys from a diverse cross-section of SME owners, employing a cross-sectional approach.The study adopted a positivist philosophical framework, emphasising quantitative data analysis to derive conclusions. A total of 250 responses were collected, yielding a robust response rate of 82%. The analysis involved descriptive statistics and correlation analysis, with the correlation matrix revealing a positive, statistically significant correlation (r = 0.504, p < 0.05) between financial sustainability and financial well-being. The findings indicate that higher levels of financial sustainability are associated with greater financial well-being among SME owners, though the strength of this relationship is moderate. The regression analysis further supports this positive association, suggesting that interventions aimed at enhancing financial sustainability may significantly improve the financial well-being of SME owners. These results align with the theoretical framework of the Easterlin Paradox, which highlights the relative importance of financial stability in enhancing overall well-being. Based on these findings, several recommendations are proposed, including fostering financial literacy, enhancing access to financial resources, and promoting entrepreneurial collaboration.

Improved urban road network and small and medium enterprises’ financial performance: Evidence from Tanzania

This study assessed the impact of improved urban road network on financial performance of Small and Medium Enterprises focusing in Dodoma, Tanzania. The study employed a cross sectional research design where by a sample of 89 SMEs from the selected three wards in Dodoma city was used to draw the conclusion. Qualitative data collected through questionnaires were analyzed using content analysis while quantitative data analyzed using descriptive statistics and multiple regression analysis. The key findings from the study include: i) accessible roads to customers toward SME were having positive influence to SMEs performance ii) market accessibility by customers and consumers was the key factor in improving SMEs financial performance in Dodoma city and lastly, an effective time management and improved transportation of goods and services were positive related to the amount of sales revenue generated by SMEs. The conclusion is drawn to improve the urban road networks as among of the key factors in improving the performance of SMEs in Dodoma city by increasing sales and profit. It is therefore recommended that, the government and other stakeholders in the construction sector should continue to improve urban road networks and start offering basic business and financial management skills which would enable SMEs owners to make informed investment decisions as well as enhance their entrepreneurial skills which will facilitate in recognizing and exploiting the available business opportunities.

Entrepreneurial Behaviour in Choosing Capital Alternatives in MSMEs and Investment Trends in Indonesia

This study explores entrepreneurial behaviors that influence the decisions of SME owners in choosing financing alternatives and investment trends in Indonesia. Through quantitative study using questionnaire, this aiming to provide insights into the factors influencing the selection of financing sources and investment tendencies among SMEs. The findings reveal that entrepreneurial behaviors such as risk tolerance, financial knowledge, long-term vision, and adaptability significantly influence the decisions of SME owners in selecting funding sources. Additionally, investment trends in Indonesia also play a crucial role, with SMEs tending to choose financing alternatives that align with their business growth needs. This research contributes significantly to understanding how entrepreneurial behaviors interact with external factors such as investment trends in the context of SMEs in Indonesia. The practical implication highlighting importance of a better understanding of the dynamics of financing decisions among SMEs and how governments and relevant institutions can support SME growth through a better understanding of financial needs and preferences to a small—medium sized business owners. The condition where workers shift from agriculture to industry often occurs with the advent of industrialization.

Navigating Reversed Valuation Dilemmas: SME Enterprises Nationalized in 1950s Poland - A Case Study

The publication describes a problem that often arises in court cases regarding the valuation of SME forcibly nationalized in the 1950s. Valuation of compensation to previous SME owners is an ongoing court debate in Poland. The authors proposed an approach that took into account the economic conditions at that time and complied with the principle of paying compensation for the actual losses incurred, and not for the potential losses that could be incurred as a result. At the same time, the publication analysed other similar judgments in cases regarding compensation for nationalized enterprises. The practical and scientific value of the publication lies in the fact that it addresses an existing practical problem and its solution. Research Design & Methods: the paper presents a conceptual proposal of the SME valuation method in unique circumstances, complemented by a detailed case study illustrating the application of this valuation approach. Findings: When calculating the compensation for nationalization or other forms of expropriation courts use various methods of valuing net assets (fair market value, book value, recreation value) plus separately determine the value of intangibles, such as licenses, based on the discounted average profits from such assets for a reasonable period of time. If indexation was employed (for historical cost valuation), it used either average interest rates in the economy, the cost of capital of a company, or the cost of lost opportunities for a particular company. Using discounted cash flow valuation for the entire business was uncommon and even if it was included in the bilateral investment treaties (which were meant to protect investors from expropriation) it was considered by the tribunals as speculative and unreliable. Our approach proposes net asset value approach with the use of inflation or average salaries for indexation (to calculate current values of assets) and a combined approach of historical values if they were known at the moment of nationalization and modern estimates of values of remaining assets (that belonged to the company but their value was not provided in the original documentation). Implications & Recommendations: The analysis of historical compensation decisions and bilateral investment treaties suggests that the most popular approach to valuing a loss from expropriation is the fair market value approach and net assets approach with a separate valuation of significant intangible assets provided that they gave certainty of profits for the investor. Contribution & Value Added: The practical and scientific value of the publication lies in the fact that it presents an existing practical problem of court calculation of compensations to owners of forcibly nationalized SMEs in Poland and its solution together with methodological framework that can be used in the future

Factors Influencing the Sustainability of SMEs in Marginalized Areas: A Study of Dullu Municipality, Dailekh

This research scrutinizes the underlying factors influencing the sustainability of SMEs in marginalized areas, with a particular focus on dimensions such as creativity and innovation, resource availability, regulatory compliance, networking and collaboration, and market competitiveness. It is conducted in Dullu Municipality, Dailekh, and employs an explanatory research design complemented by quantitative methods. Convenience sampling methodology is employed to gather data from a sample of 225 SME proprietors, who are selected as respondents for the study, utilizing survey questionnaires. Inferential statistics, including correlation and regression analysis, reveal the significant impact of creativity and innovation, efficient resource availability, regulatory compliance, networking and collaboration, and market competition on sustainable SMEs. The findings of the study recommend that owners of SMEs give more priority to innovation, optimal utilization of resources, and fostering networks and collaboration among SMEs. Furthermore, policymakers are urged to design initiatives supporting regulatory compliance and incentivizing innovation. Future research is recommended to explore market dynamics and compliance barriers, informing strategies for sustainable SMEs in marginalized locales.

The mediation role of innovation in the relationship between total quality management and performance of small and medium scale enterprises

PurposeThis study examined the mediation-moderation role of innovation and market dynamism in the association between total quality management (TQM) practices and the performance of small and medium-scale enterprises' (SMEs') performance with empirical evidence from sub-Saharan Africa.Design/methodology/approachUsing a questionnaire, the research model developed was tested with responses from 203 owners and managers of SMEs in Ghana. The analyses were done using Statistical Package for the Social Sciences (SPSS) and Smart Partial Least Squares Structural Equation Modeling (PLS-SEM).FindingsThe innovation initiatives partially and fully mediated the relationship between TQM practices and the performance of SMEs. Also, the indirect effect of TQM practices of SMEs on performance through innovation initiatives was negatively moderated by market dynamism.Practical implicationsThe study contributes to the TQM literature by validating the indirect and direct relationship between TQM practices and performance in the context of SMEs in a developing region.Originality/valueThis paper presents a novel understanding of the relationship between TQM and SMEs in developing regions of the world. The paper serves as a guide for SME owners and managers to improve the performance of their organizations through TQM practices.

The Impact of Organizational Culture and Spiritual Leadership on Performance: Mediating Roles of Workplace Spirituality and Innovation

Objective: This study investigates the relationship between organizational culture, spiritual leadership, workplace spirituality, innovative behavior, and organizational performance in SMEs in Madura]. Theoretical Framework: The study enriches the understanding of the role of organizational culture, spiritual leadership, and spirituality in organizational performance Method: Data were collected through in-depth interviews, observations, and document analysis from 35 SME owners and employees in four districts of Madura. Results and Discussion: Results show that an organizational culture that emphasizes spiritual values such as integrity, fairness, and empathy has a positive impact on organizational performance. Spiritual leadership is instrumental in shaping an organizational culture that supports these values and champions employee well-being, thus creating a productive and meaningful work environment. Spirituality at work serves as a significant mediator between organizational culture, spiritual leadership, and organizational performance. Employees who perceive spiritual values in the organizational culture are more connected to their work and have higher intrinsic motivation, which increases innovative behavior and organizational performance Research Implications: These findings can be used by organizational leaders and human resource managers to develop effective strategies for creating an organizational culture that supports high-performance and continuous innovation. However, this study had methodological limitations that should be addressed in future research.

Perceptions of Tax Compliance Willingness among Sme Owners in Kcca, Uganda

Perceptions of Tax Compliance Willingness among Sme Owners in Kcca, Uganda

Entrepreneurial passion on the success of SME’s in Plateau State, Nigeria: The role of entrepreneurial skills

Purpose: The purpose of the study was to examine the extent to which entrepreneurial skills mediate the influences of entrepreneurial passion on the entrepreneurial success of SMEs in Plateau State, Nigeria. Research Methodology: The researchers self-administered 337 questionnaires to SME owners in the Jos North and South LGA of Plateau State, Nigeria, and obtained a response rate of 91.1%. Quantitative data were analyzed using PLS-SEM version 3.0. Results: Results showed that Entrepreneurial skills partially and fully mediated the influence of entrepreneurial passion on entrepreneurial success. Limitations: The study was limited to SME owners in the Jos North and South LGA of Plateau State, Nigeria. Contribution: This study contributes to the body of knowledge in entrepreneurship literature. It helps policymakers formulate holistic policies that will encourage entrepreneurship and skill acquisition, as well as enhance the socio-economic well-being of people via entrepreneurship. It also helps entrepreneurs, business owners, managers, and aspiring entrepreneurs learn and obtain the necessary skills, knowledge, and abilities to succeed.