Economic and Management Sciences

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Browsing Economic and Management Sciences by Subject "access to finance"

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    Challenges faced by Small and Medium Enterprises in Lesotho
    (University of the Free State, 2023) Seturumane, Thabo; Peters, Mark
    Small and Medium Enterprises (SMEs) are considered the main catalysts behind economic growth and overall national development as they are renowned for addressing socio-economic issues confronting a specific country. As a result, different governments in developed and developing countries leverage the SME sector to expand the employment grid and tackle poverty-related issues. As such, creating an enabling environment for the success of SMEs is one of the main policy agendas world-wide, and governments constantly seek to develop policies that address SMEs’ challenges to ensure their sustainability. However, in light of these efforts, SMEs still encounter several challenges that limit their growth, subsequently failing to fulfil their mandate of addressing the socio-economic challenges. Therefore, the primary objective of this study was to determine the challenges SMEs in Lesotho face. The study assumed a quantitative approach. A survey questionnaire was used as a primary data collection instrument, utilising a database of SMEs in Lesotho using emails compiled from their online presence. A sample of 400 SMEs was chosen using a simple random sampling technique from a population of 76 000 SMEs in Lesotho. The study employed descriptive statistics to determine the characteristics and distribution of the data. The data analysis employed the Chi-Square test and the Pearson Correlation test to reveal the associations and relationships between the challenges faced by SMEs and SMEs' performance, the relationship between the government of Lesotho (GoL) intervention and SMEs' access to finance, and the relationship between the challenge of access to finance, including several other challenges. Based on the Chi-Square test, the study's findings revealed associations between the challenge of access to finance, workplace skills, employee retention, marketing challenges, technological challenges, and other challenges (e.g., Covid-19, crime rate, labour law), including SMEs’ performance. Furthermore, the study established associations between GoL intervention and SMEs' access to finance. Lastly, the study determined associations between the challenge of access to finance and several challenges confronting SMEs in Lesotho. The Pearson-Correlation test found statistically significant negative relationships between the challenge of access to finance, workforce skills, technological challenges, and other challenges (e.g., Covid-19, crime rate, labour law) and SMEs’ performance. Also, a significant negative relationship was established between GoL intervention and SMEs' access to finance. Finally, the study discovered significant positive relationships between the challenge of access to finance and workforce skills, including technological and other challenges (Covid-19, Crime rate, labour law).