A review of constraint factors affecting the growth of Small and Medium Enterprises (SMEs) The case of ‘ALGERIA’

Year 2024, Volume: 4 Issue: 2, 12 - 36, 30.12.2024

Sıhem Djıdjık

https://doi.org/10.61725/abj.1414992

Abstract

Internationally, small and medium enterprises (SMEs) growth depends upon an opportune market environment. However, in Algerian context, SEMs face numerous obstacles such as limited financial resources, lack of entrepreneurial knowledge, mediocre market accessibility, poor learning and growth, bureaucracy procedure and corruption etc. which impedes their growth. This research paper aims to evaluate the factors hindering the development of SMEs in Algeria. Several factors as insufficiency of business training, capital scarcity, financial constraints, poor production, lack of innovation, strict regulations, high corruption, slight access to information, lack of motivation from managers and business owners, insufficient raw materials, human resources challenges, collateral concern, lack of human skills, lack of a strong managerial strategies and consistent culture.
In this study, a mixed-methodology approach was carried, an overall content of analysis to extract the common constraints from 20 articles of literature review in the case of Algerian SMEs. Following this line, a quantitative approach is applied by using statistical description to determine both frequency and percentage of the chosen factors to be analyzed in order to select the highly significant variables affecting SMEs growth in Algeria. The results reveal that Algerian SME growth of companies in Algeria is particularly effected and exercised under several constraints; Access to finance and the business environment in which SMEs operate present gaps that can significantly hinder their growth…etc.
The study suggests that more financial support with a whole control process by lowering interest rates and simplifying the procedures as regards to bank loans should be given to SMEs to support and enable them to manage their business, in addition, the government must fund these SMEs by reduce some corporate barriers such as reducing regulations, levying taxes. Moreover, business training should be provided to all SMEs by the government through the launch of new organizations to facilitate business knowledge.

Keywords

SME, constraints, obstacles, growth, challenges.

Ethical Statement

I confirm that the research presented in this article adheres to the highest ethical standards. All procedures and methodologies were conducted in accordance with ethical guidelines and regulations.

Supporting Institution

YTB and AYBU

Project Number

1

Thanks

I would like to express my sincere gratitude to Professor Hsan Engin Sener, my supervisor, for his invaluable guidance, unwavering support, and daily mentorship throughout the research process. His expertise and encouragement have significantly contributed to the development and completion of this work. I am also grateful for the support provided by Ankara Yildirim Beyazit University, which has played a crucial role in the realization of this research.

References

• Abadli, R., Kooli, C., & Otmani, A. (2020). Entrepreneurial culture and promotion of exporting in Algerian SMEs: Perception, reality and challenges. International Journal of Entrepreneurship and Small Business, 41(2), 227-240.