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The Impact of Small and Medium Enterprises (SMEs) on Economic Growth and Job Creation in Somalia

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  • Bashir Ahmed Maow

    (Ondokuz Mayıs University, Faculty of Agriculture, Department of Agriculture Structures and irrigation, Samsun, Turkey)

Abstract

Entrepreneurship is crucial to raising the standard of living and promoting the development of the economy. Small and medium-sized enterprises are recognized as solutions for economic growth, modernization, job creation, and income generation. The focus of this study is on how SMEs can contribute to job creation and economic growth in Somalia. This study uses a descriptive research design and a quantitative approach to gain insight into variables. A sample size of 201 participants was chosen and determined using a method of purposive or judgmental sampling. The researcher developed the questionnaire as a data collection tool which was collected using a Google forms Survey program, then edited, collated and tabulated using SPSS -statistical computer software- Version 22 and Excel 2010. Finally researchers corrected certain mistakes and anomalies to improve validity and reliability. Our study found that lack of funding, poor management skills and certain government policies are key barriers for small and medium-sized enterprises in Somalia. Our study also indicated that countries’ poor policies on imported products, humanitarian aid and unregulated competition have a negative effect on developing small and medium enterprises in the region. In this study concluded that providing access to finance through banks and large companies, giving enough knowledge and skills and introducing effective policies for the growth of small and medium enterprises by the government will enhance small and medium enterprises in Somalia.

Suggested Citation

  • Bashir Ahmed Maow, 2021. "The Impact of Small and Medium Enterprises (SMEs) on Economic Growth and Job Creation in Somalia," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 8(1), pages 45-56, January.
    • Handle: RePEc:ist:iujepr:v:8:y:2021:i:1:p:45-56
    DOI: 10.26650/JEPR818861
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    References listed on IDEAS

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    1. Pissarides, Francesca, 1999. "Is lack of funds the main obstacle to growth? ebrd's experience with small- and medium-sized businesses in central and eastern europe," Journal of Business Venturing, Elsevier, vol. 14(5-6), pages 519-539.
    2. Muhammad Khalique1, & Abu Hassan Md . Isa & Jamal Abdul Nassir Shaari, 2011. "Challenges for Pakistani SMEs in a Knowledge-Based Economy," Indus Journal of Management & Social Science (IJMSS), Department of Business Administration, vol. 5(2), pages 74-80, June.
    3. Berger, Allen N. & Udell, Gregory F., 2006. "A more complete conceptual framework for SME finance," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2945-2966, November.
    4. Menkhoff, Lukas & Neuberger, Doris & Rungruxsirivorn, Ornsiri, 2012. "Collateral and its substitutes in emerging markets’ lending," Journal of Banking & Finance, Elsevier, vol. 36(3), pages 817-834.
    5. Lara Al-Haddad & Muhammad Safdar Sial & Imdad Ali & Rahmat Alam & Nguyen Vinh Khuong & Thai Hong Thuy Khanh, 2019. "The Role of Small and Medium Enterprises (SMEs) in Employment Generation and Economic Growth: A Study of Marble Industry in Emerging Economy," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(6), pages 174-187, October.
    6. Céline Kauffmann, 2005. "Financing SMEs in Africa," OECD Development Centre Policy Insights 7, OECD Publishing.
    7. Fredriksson, Antti & Moro, Andrea, 2014. "Bank–SMEs relationships and banks’ risk-adjusted profitability," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 67-77.
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    Cited by:

    1. Larissa M. Batrancea & Mehmet Ali Balcı & Leontina Chermezan & Ömer Akgüller & Ema Speranta Masca & Lucian Gaban, 2022. "Sources of SMEs Financing and Their Impact on Economic Growth across the European Union: Insights from a Panel Data Study Spanning Sixteen Years," Sustainability, MDPI, vol. 14(22), pages 1-18, November.

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    More about this item

    Keywords

    Small and Medium enterprises; Job creation; Economic growth; Access to capital Somalia;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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