Factors Affecting Performance of SMEs: A Study on Satkhira District of Bangladesh
Abstract
The development of SMEs has always been a big challenge in developing countries. While SMEs are playing a significant role in the economic growth of Bangladesh, there is a lack of research examining the effects of some factors on their performance. This article proposes a conceptual framework and explains the internal factors affecting SMEs performance. The study employed qualitative interviews with the owners of SMEs dealing with 1. mango cultivation, 2. shrimp cultivation, 3. soiltali, 4. solar panels, 5. jewelry, 6. nursery, 7. cultivation of monosex tilapia, 8. shilpata, 9. sawmill, and 10. cultivation of various flowers in the Satkhira district of Bangladesh. This study examined six factors, such as access to finance, managerial skills, government support, innovation activities, education and experience, and level of corruption, to determine the performance of SMEs in terms of profit. The study area covers five of the seven Upazila of Satkhira district. To reach the objective, seven hypotheses were developed in the study. The collected data were analyzed, and the hypotheses were tested using ANOVA, single-factor analysis, multiple regression analysis, and other statistical tools. The results of the study revealed that the most significant factors affecting the performance of SMEs in Bangladesh were the level of corruption, access to finance, and government support. Policymakers should take steps in light of the findings of the study to improve the performance and ensure the growth of SMEs in Bangladesh.
References
Ahmed K, Chowdhury TA. Performance evaluation of SMEs of Bangladesh. Int J Bus Manag. 2009 July; 4 (7): 126–133. doi: 10.5539/ijbm.v4n7p126.
Ahmed MU. Development of small-scale industries in Bangladesh in the new millennium: challenges and opportunities. Asian Aff. 1999; 21 (1, January-March).
Ahmed MU. Development potentials of microenterprise in Bangladesh: an analysis of issues and constraint. Bangladesh J Pol Econ. 2000; 15 (1): 141–174.
Ahmed K, Chowdhury TA. Performance evaluation of SMEs of Bangladesh. Int J Bus Manag. 2009; 4 (7): 126–133. doi: 10.5539/ijbm.v4n7p126.
Wengel JT, Rodriguez E. SME export performance in Indonesia after the crisis. Small Bus Econ. 2006 February; 26 (1): 25–37. doi: 10.1007/s11187-004-6491-y.
Alkali MN, Monguno AK, Mustafa BS. Overview of Islamic actors in northeastern Nigeria. Vol. 2. Oxford, The United Kingdom: Nigeria Research Network (NRN), Oxford Department of International Development Queen Elizabeth House, University of Oxford; 2012.
Anggadwita G, Mustafid QY. Identification of Factors influencing the performance of Small medium enterprises (SMEs). Procedia Soc Behav Sci. 2014; 115: 415–423. doi: 10.1016/j.sbspro.2014.02.448
Callaghan M, Hubbard P. The Asian infrastructure investment bank: multilateralism on the silk road. China Econ J. 2016 May 3;
(2): 116–139. doi: 10.1080/17538963.2016.1162970. 9. Asma BB, Diabate A, Othman A. Establishing the factors affecting the growth of SMEs in Algeria. Am Int J Soc Sci. 2015; 4 (2): 101–115.
Chowdhury F. Customized form of Finance for SMEs, seminar. In: Proceedings of the National SME Development Program for OIC Member Countries. Dhaka, Bangladesh: FBCCI; 2007.
Chittithaworn C, Islam MA, Keawchana T, Muhd Yusuf DH. Factors affecting business success of small & medium enterprises (SMEs) in Thailand. Asian Soc Sci. 2011 May 1; 7 (5): 180–190. doi: 10.5539/ass.v7n5p180.
Ganyaupfu EM. Entrepreneurand firm CharacteristicsAffecting success of small and medium enterprises (SMEs) in Gauteng Province. Int J Innov Res Manag. 2013; 9: 1–8.
Imran M, Hamid SN. The influence of TQM on export performance of SMEs: empirical evidence from manufacturing sector in Pakistan using PLS-SEM. Manag Sci Lett. 2018; 8 (5): 483–496. doi: 10.5267/j.msl.2018.3.003. 14. Sidik IG. Conceptual framework of factors affecting SME Development: mediating factors on the relationship of entrepreneur traits and SME performance. Procedia Econ Fin. 2012; 4: 373–383. doi: 10.1016/S2212-5671(12)00351-6. 15. Hallberg K. A market oriented strategy for small and medium-scale enterprises IFC Discussion Paper No. 40. Washington, DC, USA: World Bank; 2002.
Raihan A. A Paper presented in Expert Group Meeting on “Improving Competitiveness of SMEs in Developing Countries: role of finance, including e-finance to enhance enterprise development.” Geneva, Palais des Nations; October 2001; 2001. pp. 22–24.
Likert R. A technique for the measurement of attitudes. Arch Psychol. 1932; 140: 1–55.
Mashimba H, Kühl R. Performance of micro and small-scale enterprises (MSEs) in Tanzania: growth hazards of fruit and vegetables processing vendors. J Appl Econ Bus Res. 2014; 4: 120– 133.
Indarti N, Langenberg M. Factors affecting business success among SMEs: empirical evidences from Indonesia. In: Proceedings of the Second Bi-annual European Summer University. Vol. 19 20 & 21. Enschede, The Netherlands: University Twente; 2004.
Uddin SMN. SME development and regional economic integration, seminar. In: Proceedings, Joint Regional Workshop held in Tokyo, Japan; 2008.
Industrial policy. Bangladesh: Ministry of Industry, Government of Bangladesh; 2016.
Kothari CR. Research methodology: methods and techniques, second. rev ed. New Delhi, India: New Age International (P) limited, 2007; 2004 [reprint]:176.
Lader P. The public/private partnership, Springs. 1996; 35 (2): 41–44.
Li Y, Huang J, Tsai M. Entrepreneurial orientation and firm performance: the role of knowledge creation process. Ind Mark Manag. 2009; 38 (4): 440–449. doi: 10.1016/j.indmarman.2008.02.004, P. 440.
Msoka EM. Do entrepreneurship skills have an influence on the performance of women owned enterprises in Africa? Case of micro and small enterprises in Dar es Salaam, Tanzania. Int J Bus Humanit Technol. 2013; 3 (3): 53–62. 26. Rahman MM, Khondker M. (2020). Small and medium enterprises (SME) development and economic growth of Bangladesh: A Narrative of the glorious 50 years. [Online] Available at https://www.researchgate.net/publication/358138997_Small_and_Medium_Enterprises_SME_De velopment_and_Economic_Growth_of_Bangladesh_A_Narrative_of_the_Glorious_50_Years [Accessed on November 2023].
