Determinants of Growth for Small and Medium Enterprises in Namibia (PDF)

Academic Paper from the year 2020 in the subject Business economics - Business Management, Corporate Governance, , language: English, abstract: SMEs are still incertitude in their quest to run their business effectively. These compunctions are lack of access to finance, lack of access to market, lack of growth, poor education, lack of family support and poor business skills. All these determinants hamper the SMEs, which ultimately leads to their failure. Globally, SMEs are engines of expansion because they play a strategic role in poverty alleviation, job creation and wealth provision of regional equilibrium through industrial dispersal and reduction of rural-urban migration. We argue that if much had been done by State to promote SMEs, then the rate of unemployment would be one digit, not two digits in Namibia. The ease of making business in Namibia is appalling rated by WHO as an environment which does not promote and not easy to enhance SMEs growth. The regulatory environment for SMEs is very challenging. There are so many prohibiting procedures for starting a business as a local and foreigner.

The overall research design of this rubric entailed a survey research method and drew from the procedures for researching small tourism businesses in Katima Mulilo. We made cross-sectional study and involved a sample of 14 entrepreneurs that was got between March 2017 and August 2018. Status of growth for Katima Mulilo shows that 0-2% have 10% growth, while 20% had 3-4% growth, 60% of the SMEs had average growth 5-9%. The remaining 20% had high growth of 10-25% status of growth in the company. The component score coefficient matrix shows factor component loadings using the principal component analysis. The factor loadings for individual characteristics, social determinants, poor business location and poor financial management, are very low symbolising that they are poor while human capital and planning and ordaining are higher than 0.40. They are symbolising that they are moderately below par. The principal component analysis is a variable reduction analysis and vital for checking redundancy for the figures. Factor analysis in this study assumes that covariation among the observed variable is due to the presence of one or more latent variables which exert directional influenced observed variables. We recommend that the government should have a National Entrepreneurship Policy Framework and Implementation Guideline and put in place an Entrepreneurial Act to promote Entrepreneurs in the Country.