An analysis of bottlenecks to SME growth in developing countries: A case of Malawi

Abstract

Trade and industry have been key and crucial aspects of economic growth in every country and in most economies that are matured and self reliant, overall productivity has been realised mostly from trade activities. The most important question entrepreneurs struggle to address is where their businesses would be after some period of time, that is, whether the entities will grow substantially as anticipated by the owners on the onset. A lot of challenges exist that suffocate business especially those in the SME category and the lucky ones among many remain stagnant in size, profitability and efficiency.   This paper investigates the key challenges faced by small businesses which hinder most of them from growing to the expected levels with particular emphasis on developing African economies which are mostly donor dependent. Through a questionnaire survey, the study reveals that the SME challenges are multifaceted ranging from basic management skills to access to finance.  The findings of this study will assist firstly, the policy makers in the economy to create an environment conducive to the growth and consistent outstanding performance of SMEs in any economy; and secondly the entrepreneurs themselves will be able to identify any self made challenges in their operations and avoid recurrence of the same.

Key words: Small and Medium Enterprises, economic development, business growth, SME financing, entrepreneurship