Barriers constraining the growth of and potential solutions for emerging entrepreneurial SMEs

Abstract

Purpose Pakistan has marvellous growth and development capacity, and entrepreneurial small- and medium-sized enterprises (SMEs) play a key role in its development. As it is believed that entrepreneurial SMEs make an important contribution to the economy by providing employment and soaring production capacity, the purpose of this study is to investigate the hurdles that affect their performance. Design/methodology/approach A questionnaire-based survey was used to collect data from 225 entrepreneurial SMEs owners and managers in the southern region of Pakistan. Statistical analysis in SPSS was conducted to determine the barriers that limit the growth and development of SMEs. Findings The findings show that factors affecting entrepreneurial SMEs’ performance in Pakistan are lack of finance and infrastructure as well as economic barriers, corruption and management issues. These obstacles are positively and significantly associated with entrepreneurial SMEs’ failure. Originality/value This study’s significance lies in its identification of the barriers that affect the performance of entrepreneurial SMEs in Pakistan. The author also suggests how policymakers can devise better policies for SME growth.