Factors Affecting Performance of SMEs: A Study on Satkhira District of Bangladesh

Tajul Islam; Md. Ashraful Alam

Abstract

The development of SMEs has always been a big challenge in developing countries. While SMEs are playing a significant role in the economic growth of Bangladesh, there is a lack of research examining the effects of some factors on their performance. This article proposes a conceptual framework and explains the internal factors affecting SMEs performance. The study employed qualitative interviews with the owners of SMEs dealing with 1. mango cultivation, 2. shrimp cultivation, 3. soiltali, 4. solar panels, 5. jewelry, 6. nursery, 7. cultivation of monosex tilapia, 8. shilpata, 9. sawmill, and 10. cultivation of various flowers in the Satkhira district of Bangladesh. This study examined six factors, such as access to finance, managerial skills, government support, innovation activities, education and experience, and level of corruption, to determine the performance of SMEs in terms of profit. The study area covers five of the seven Upazila of Satkhira district. To reach the objective, seven hypotheses were developed in the study. The collected data were analyzed, and the hypotheses were tested using ANOVA, single-factor analysis, multiple regression analysis, and other statistical tools. The results of the study revealed that the most significant factors affecting the performance of SMEs in Bangladesh were the level of corruption, access to finance, and government support. Policymakers should take steps in light of the findings of the study to improve the performance and ensure the growth of SMEs in Bangladesh.