Major Challenges Facing Small and Medium-Sized Enterprises in Asia and Solutions for Mitigating Them

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. Farhad Taghizadeh-Hesary is Assistant Professor of Economics, Keio University, Tokyo, and Visiting Professor, Graduate School of Economics, University of Tokyo.The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractSmall and medium-sized enterprises (SMEs) are the backbone of the Asian economy. They make up more than 98% of all Asian businesses that provide two out of three private sector jobs in the region. Therefore, it is vitally important for Asia's economic success to have fully functioning support measures for SMEs. However, SMEs face challenges from limited access to finance, lack of databases, low R&D expenditures, undeveloped sales channels, and low levels of financial inclusion, which are some of the reasons behind the slow growth of SMEs. This paper focuses on four major reasons that slowed the SME growth in Asia including i) lack of finance, ii) lack of comprehensive databases, iii) low level of R&D expenditures, and iv) insufficient use of information technology and provides remedies for mitigating them. JEL Classification: G21, G24, G32 ADBI Working Paper 564Yoshino and Taghizadeh-Hesary

Financial Competence of Micro, Small, and Medium Enterprises in Ponorogo

“…Many MSMEs are not bankable, because generally MSMEs do not have good bookkeeping, whereas good bookkeeping is one of the requirements to obtain financing from the bank. The same thing was also put forward by Yoshino and Taghizadeh (2016), Tambunan (2008), Bellefleur, et.al. (2012).…”

Applicability of theory of constraint in predicting Ghanaian SMEs investment decisions

“…Yoshino and Taghizadeh-Hesary (2016) reported the following as the main reasons for the retardation of SMEs growth. These are (a) absence of finance, (b) absence of appropriate databases, (c) low level of R&D expenditures, and (d) inadequate use of information technology.…”

“…H5 = Lack of external funding will relate negatively to SMEs WTI Information flow: Another challenge that affects small and medium enterprises is lack of access to reliable information. Businesses cited in Africa suffer immensely from inadequate business information from both service providers and government institutions (Chopra et al, 2007;Oshikoya & Hussian, 2007;Hamisi, 2010;Nyang'au 2013;Kamunge et al, 2014;Yoshino & Taghizadeh-Hesary, 2016;Emezie 2017). The major problem arises from poor environmental information emanating from the business fraternity due to undeveloped communication infrastructure and technological inadequacies (Kamunge et al, 2014;Oshikoya & Hussain, 2007).…”

The Factors Influencing SMEs Growth in Africa: A Case of SMEs in Zimbabwe

“…Yoshino and Taghizadeh-Hesary [11] revealed that SMEs made up more than 98% of Asian businesses providing two out of three private sector jobs. The authors also emphasised that functional support is vital for the sector.…”