Recognizing the important role played by Small and Medium Enterprises in the development processes of the Gambian economy, the government has taken several measures to foster and promote their growth. However, irrespective of these interventions, there still exist a number of constraints which continue to afflict the sector’s growth and performance. This study delves into the constraints that inhibit SMEs growth and investment in The Gambia. The study adopts a critical literature review as the research design. The study established the factors impeding growth of SMEs in The Gambia as lack of access to credit, inadequate managerial knowledge and skills, lack of access to market and limited access to business development services. The implication suggests the need to enhance the managerial capabilities of the SMEs entrepreneurs through training, as well as to provide easy access to finance, market and business development services.
Cite this article:
Musa L. Faal. Understanding binding Constraints to small and medium Enterprises (SMEs) in The Gambia: A Critical Review. Asian Journal of Management. 2020;11(2):216-221. doi: 10.5958/2321-5763.2020.00034.7
1. Abdullah, M.A. and Baker, M. Small and Medium Enterprises in Asian Pacific Countries. American Journal of Small Business. 2000; 5.
2. Abor, J. and Quartey P. Issues in SME Development in Ghana and South Africa, International Research Journal of Finance and Economics. 2010; 39: 218-228.
3. African Development Fund. The Gambia Entrepreneurship Promotion and Microfinance Development Project. Department of Social and Human Development, Tunis.2006.
4. Aldaba, R. M. SMEs Access to Finance: Philippines in Harvie, C., S. Oum, and Narjoko D. Small and Medium Enterprises (SMEs) Access to Finance in Selected East Asian Economies. ERIA Research Project Report 2010-14, Jakarta. 2011: 291-350.
5. Arimah, B.C. Nature and Determinants of Linkages between Formal and Informal Sector in Nigeria. African Development Review. 2001.
6. Arthur, P. Promoting a Local Entrepreneurial Class in Ghana: The Issues and Problems. Canadian Journal of African Studies. 2005; 39 (1): 427 – 459.
7. Aryeetey, E., Baah, A., Duggleby, T., Hettige, H. and Steel, W. Supply and Demand for Finance of Small Enterprise in Ghana. World Bank. 1994.
8. Auciello, K.E. Employment Generation through Stimulation of Small Industries. An International Compilation of Small – Scale Industry Definitions. Georgia, Institute of Technology. Atlanta. 1975.
9. Ayyagari, M., Demirguc-Kunt, A., & Maksimovic, V. How well do Institutional Theories Explain Firms’ Perceptions of Property Rights? World Bank Working Paper. 2005.
10. Barringer, B. R, and Ireland, R. D. Entrepreneurship: Successfully Launching New Ventures Bank for Reconstruction and Development. World Bank Institute, New York. 2006.
11. Beck, T. and Levine, R. Small and Medium Enterprises, Growth and Poverty: Cross Country Evidence. New York. 2003.
12. Beck, T., Kunt, D.A.¸ and Maksimovic, V. The Influence of Financial and Legal Institutions on Firm Size. Journal of Banking and Finance. 2006; 30(11).
13. Central Statistical Authority. Urban Informal Sector Sample Survey. Central Statistical Authority of Ethiopia. Addis Ababa. 2003.
14. Charmes, J. Contributions of Informal Sector to GDP in Developing Countries: Assessment, Estimates, Methods, Orientation for the Future. Proceedings of the 4th Meeting of the Expert Group on Informal Sector Statistics. Geneva.2000.
15. Cooper, A., Gimeno-Gascon, J. and Woo, C.Y. (1994). Initial Human and Financial Capital as Predictors of New Venture Performance. Journal of Business Venturing. 1994; 9 (4).
16. Cortes, M., Berry, A. and Ishaq. A.M. Success in Small and Medium-Scale Enterprises: The Evidence from Colombia. Oxford: Oxford University Press.1987.
17. Craig, B.R, Jackson, W.E. and Thomson, J.B. Small Firm Finance, Credit Rationing, and the Impact of SBA-Guaranteed Lending on Local Economic Growth. Journal of Small Business Management. 2007; 25(6).
18. Cunningham, V.W. and Maloney, F.W. Heterogeneity among Mexico’s micro enterprises: application of factor and cluster analysis. Washington DC. 2001.
19. Dockel, J.A. and Ligthelm, A.A. Factors Responsible for the Growth of Small Businesses. South African Journal of Economic and Management Sciences. 2005; 8(1).
20. Emma I, Okoye, Akamoibi and Ndidika. L. Repositioning and Micro Small Enterprises in Orumba South L.G.A. of Anambra State. Multidisciplinary Journal of Research Development. 2009; 12 (3).
21. Eshetu, B. and Eleke, W. Factors that Affect the Long-Term Survival of Micro, Small and Medium Enterprises in Ethiopia. South African Journal of Economics, 2008; 6 (3).
22. Fay and Clark. Small and Medium-Sized Business Imperatives. Homewood. Boston.
23. Gebeyehu, W. and Assefa, D. (2004). Role of Micro and Small Enterprises in the Economic Development of Ethiopia. Federal Micro and Small Enterprises Agency, Addis Ababa. 2000.
24. Gebrehiwot, A. and Wolday, A. Micro and Small Enterprises Finance in Ethiopia: Empirical Evidence. Eastern Africa Social Science Research Review, 2006; 22 (1).
25. Gomez, G. M. Do Micro Enterprises Promote Equity or Growth? Gorinchem: Institute of Social Studies. 2008.
26. Hashim, H. SME Development Framework: The Malaysian Case. Available from URL. http://www.cbe.org.eg/.pdf/ 2015.
27. Hitt, A. M., Ireland, D.R. and Hoskisson, R.E. Strategic Management: Competitiveness and Globalization, South-Western Cengage Learning. 2009; 8th ed.
28. Hooi, L.W. Implementing e-HRM: The Readiness of SME Manufacturing Company in Malaysia, Asia Pacific Business Review. 2006; 12 (4), 465-485.
29. Hsieh, M.E. Hallowing Out or Sustaining Taiwan’s SME Network- Based Production System Reconsidered 1996 – 2011. Taiwanese Sociology. 2014; 28: 149- 191.
30. Ishengoma, K. and Kappel, R. Economic Growth and Poverty: Does Formalization of Informal Enterprises Matter? German Institute of Global and Area Studies, Hamburg. 2006.
31. Ishengoma, E. and Kappel, R. Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda. German Institute of Global and Area Studies, Hamburg. 2008.
32. Kamara, A. B. Challenges of Small and Medium Retail Enterprises in Gambia and Ghana. Qualitative Case Study, Ph.D. Dissertation, University of Phoenix, Temple, Arizona, USA. 2018.
33. Katua, N.T. The Role of SMEs in Employment Creation and Economic Growth in Selected Countries. International Journal of Education and Research. 2014; 2(12), 461- 472.
34. King, K. and McGrath, S. Globalisation, Enterprise and Knowledge. Oxford. 2002.
35. Kolvereid, L. and Isaksen, E. (2006). New Business Start-Up and Subsequent Entry into Self-Employment. Journal of Business Venturing. 2006; 21 (6).
36. Liedholm, C. and Mead, D.C. Small Enterprises and Economic Development: The Dynamics of Micro and Small Enterprises. New York. 1999.
37. Little, I.M.D. and Nigatu M. Small Manufacturing Enterprises: A Comparative Analysis of India and Other Economies. Oxford University Press, Oxford. 2003.
38. Lütkenhorst, W. Economic Development. The Role of Micro and Small Enterprises and the Rationale for Donor Support: Some Reflections on Recent Trends and Best Practices. Proceedings of the Micro and Small Enterprises Partnership Group Meeting. Hanoi. 2004.
39. McEvoy, G.M. Small Business Personnel Practices. Journal of Small Business Management. 1984.
40. Mensah, B.K.A. Financial Management Practices of Small Firms in Ghana: An Empirical Study. African Journal of Business Management. 2010; 5 (10); 3781 – 3793.
41. Ministry of Trade, Industry and Employment. Micro, Small and Medium Enterprise (MSME) Mapping Study. Banjul.2013.
42. Ministry of Trade, Industry and Employment. Micro, Small and Medium Enterprise Development in The Gambia Cluster Development Strategy. Banjul.2015.
43. Monk, R. Why Small Businesses Fail. 2000; CMA Management, 74(6).
44. Mulugeta, C. Factors Affecting the Performance of Women Entrepreneurs in Micro and Small Enterprises (The Case of Dessie Town). Unpublished MA Dissertation. Bahir Dar University. 2011.
45. Negash, Z. and Kena, T. State, Growth and Dynamism of Micro and Small Enterprises in Mekele. Microfinance Program and Economic Development. Mekele University. 2003.
46. Newton, K. Management Skills for Small Business. Available from: URL: http://strategis.ic.gc.ca/epic/site/sbrp rppe.nsf/en/ rd00255e.html/2001.
47. Ntsika N. Annual Review: Enterprise Promotion Agency. Small Business Monitor, 2004; 2 (1).
48. OECD. Good Regulatory Practices to Support Small and Medium Enterprises in Southeast Asia. OECD Publishing, Paris. 2018.
49. Olawale, F. and Garwe, D. Obstacles to the Growth of New SMEs in South Africa: A Principal Component Analysis Approach. African Journal of Business Management.2010; 4 (5), 729 – 38.
50. Paul, I. and Rahel, W. Growth Determinants of Women-Operated Micro and Small Enterprises in Tigray Region. Journal of Sustainable Development in Africa. 2010; 25 (6).
51. Peterson, R.A, Kozmetsky, G. and Ridgway, N.M. Perceived Causes of Small Business Failures: A Research Note. American Journal of Small Business. 1983; 8 (4).
52. Rogerson, C. Tracking SMME Development in South Africa. Issues of Finance, Training and Regulatory Environment. Urban Forum. 2008; 19 (1): 61 – 81.
53. Rosmary, A. Formal and Informal Institutions Lending Policies and Access to Credit by Small-Scale Enterprises in Kenya: An Empirical Assessment. The African Economic Research Consortium. 2001; 21 (5) 4.
54. Scheers, L.V. SMEs Marketing Skills Challenges in South Africa. African Journal of Business Management. 2011; 5 (13):5048-5056.
55. Schramm, C. J. Building Entrepreneurial Economies. Foreign Affairs, 2004; 83 (4).
56. Sleuwaegen, L. and Goedhuys, M. Growth of Firms in Developing Countries. Evidence from Cote d’Ivoire. Journal of Development Economics. 2002; 68 (5).
57. Smit, Y and Watkins, J. A. A Literature Review of Small and Medium Enterprises (SME) Risk Management Practices in South Africa. African Journal of Business Management, 2012; 6 (21): 6324-6330.
58. Social Development Fund. National Micro, Small and Medium Enterprises (MSMEs) Marketing Strategy. Banjul. 2014.
59. Solymossy, E. and Penna, A.A. Sustainable growth for the small business: A theory of organizational transition. Western Illinois University, Illinois.2000.
60. Teal, F. Background Information on Use of Dataset: Regional Project on Enterprise Development (RPED). Ghana Manufacturing Sector Survey Waves I-V (1992-98), Centre for the Study of African Economies, Institute of Economics and Statistics. 2002.
61. UNIDO. Entrepreneurial Skills for Group Based Micro and Small Enterprises: Trainers’ Manual Vehicles for Poverty Reduction, Employment Creation and Business Development: The Ethiopian Experience. (Research Report No. 6). Addis Ababa. 2002.
62. UNIDO. Creating an Enabling Environment for Private Sector Development in Sub- Saharan Africa. Vienna. 2008.
63. UNCTAD. The Gambia National Entrepreneurship Policy Draft. Banjul. 2016.
64. Verhees, F.J.H.M. and Muhlenberg, M.T.G. Market Orientation, Innovativeness, Product Innovation and Performance in Small Firms. Journal of Small Business Management, 2009; 42 (2).
65. Wignaraja, G. and S. O’Neil. SME Exports and Public Policies in Mauritius. Commonwealth Trade and Enterprise Paper No. 1, London. 1999.
66. Yu, S.O. Infrastructure Development and the Informal Sector. ILO Employment-Intensive Investment Branch. Geneva. 2002.