Determinants of the Business Performance of Small and Medium Enterprises in an Emerging Market Economy

Abstract

In a developing country such as Ghana, small and medium enterprises (SMEs) have become the fulcrum for economic growth and development. This study aims to examine factors influencing the business performance of SMEs in an emerging market economy.Study design/methodology/approach: A descriptive survey design was used to collect data from SMEs in the service sectors of retail, hospitality, trade/commerce and manufacturing. The target population were from two municipalities. SPSS 23.0 was used to analyse the data got through the use of the questionnaires. Findings:The results indicate that governments in emerging economies are not doing enough to help SMEs. Access to credit had aided businesses to acquire modern technologies and raw materials for operation. Many entrepreneurs used their educational level, available business information services and marketing strategies to identify potential customers and to devise better strategies for dealing with their competitors. Originality/value:The study is the first to conclude that while access to credit aids SMEs' in their operations, it can equally serve as a constraint to their performance. Besides, availability of business information service can help SMEs to gain competitive advantage. Moreover, marketing strategies impact SMEs performance positively. The study will help policy makers and development partners to fashion policies that will enhance the performance of SMEs.