Mr. Waqas Khan, Mr.Khalid Adel
Volume 2 Issue 4 | Dec 2019
DOI: 10.31841/KJEMS.2021.42
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Abstract
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.