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Evaluation of Factors Affecting ‎Small and Medium Enterprises ‎Growth in Afghanistan ‎

Mr. Waqas Khan, Mr.Khalid Adel

Volume 2 Issue 4 | Dec 2019

DOI: 10.31841/KJEMS.2021.42

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The main purpose of this study is to explore the internal and external ‎factors affecting Small and ‎Medium Enterprises (SMEs) growth in ‎Afghanistan. A robust SME sector contributes vastly to the ‎economy in ‎terms of Gross Domestic Product (GDP), by bringing down the ‎unemployment level, reducing poverty ‎and promoting entrepreneurial ‎activities. To find out those factors, this study uses Exploratory ‎Factor ‎Analysis (EFA) technique. A sample of 150 SMEs’ employees including top ‎level and middle ‎level managers were chosen for the study through a ‎structured questionnaire. Management of ‎SMEs, use of technology, ‎marketing the products, skilled labor, and structure and size of the ‎‎businesses are the internal factors affecting SMEs’ growth. Role of ‎government, education ‎curriculum and SMEs knowledge, access to finance, ‎loyal customers, and competition from ‎foreign companies are external ‎factors affecting the SMEs’ growth. The study signifies the role of ‎‎government, use of updated technology, investment on development of ‎labor for SMEs growth. It is ‎important that SMEs spend more resources on ‎marketing their products, utilize updated ‎technology, maintain and ‎increase their customers’ base, and be involved in productive ‎competition. ‎

JEL Classification Code: L30, L31 ‎

Keywords: Exploratory factors analysis, small and medium enterprises, access to ‎finance, ‎government role, technology. ‎