Analysis of Factors Affecting the Development and Growth of SMEs in Pakistan

Abstract

The purpose of this study is to understand and analyze the factors that affect development and growth of SMEs in Pakistan. Particularly we are interested in the factors; Lack of Finance, Laws and Regulations, Competition, Lack of Motivation and Poor Management.Total 100 participants completed the questionnaire that contained two sections. Section I contained 5 questions for data collection regarding demographics of the participants, Section II contained 18 different statements related to Development and Growth of SMEs, Lack of Finance, Laws and Regulations, Competition, Lack of Motivation and Poor Management. The results supported the entire developed hypothesis in this study. According to results Lack of Finance, Lack of Motivation and Poor Management negatively affects the development and growth of SMEs in Pakistan, while Laws and Regulations and Competition affects positively the development and growth of SMEs in Pakistan. A more appropriate and effective method will be the data collection from the individuals who are planning to start their own businesses and the government’s department employees who are directly engaged in formulating policies regarding SMEs, as it will give relatively more accurate and effective picture. Also, this study was restricted to the examination of limited factors that had showed some kind of significant influence on the development and growth of SMEs in Pakistan. Future research should examine both the internal and external factors in such a way that it should focus on relative internal and external factor simultaneously i.e. Govt. laws and regulations and managing finance inside the organization or competition, Lack of finance and managing internally the financing activities, study of environmental factors and management inside the organization etc. It is situational analysis; as it comprises such variables which are having most of affect on the development and growth of SMEs in Pakistan.