An Investigation Into Growth Challenges Encountered by Registered Small And Medium Enterprises in Katutura Central Constituency

ABSTRACT

The study sought to investigate the factors that hamper the growth of registered small and medium enterprises, specifically in Katutura Central Constituency, in order to develop an understanding of the dynamics of SMEs. The study was motivated by the fact that despite the establishment of the SME Incubation Centres in Katutura with the objective of assisting small businesses to grow into formal small and medium enterprises, most of them are still in incubation. The research study employed a mixed-method approach, comprising of the qualitative and quantitative research designs. The quantitative research design enabled the researcher to collect data using questionnaires and convert that data into numerical form so that statistical analyses could be made and conclusions were drawn from the statistical analyses. The qualitative design enabled the researcher to gather data through interviews and focus group discussions with the use of open-ended questions. The population of the study was 500 entrepreneurs and the sample size consisted of seventy five (75) entrepreneurs. Data was collected after the data collection instrument was approved by the supervisor. A pilot study using 10 respondents was conducted before full scale data collection. The purpose of the pilot study was to refine the questionnaires so that respondents could not have problems in recording the data. Furthermore, it enabled the researcher to obtain some assessment of the questions’ validity and the likely reliability of the data that were collected. Data from then (10) piloted respondents was analyzed and results interpreted for correctness of the research instruments. Appropriate modifications were done on the instruments. The modification of the xi questionnaire was then followed by full scale data collection. The questionnaires were administered to entrepreneurs around the Katutura Central Constituency. Qualitative data was analyzed manually by first summarizing the information gathered and then categorized and coded the responses into emerging themes. Quantitative data was then analyzed using a statistical package of Microsoft Excel. The study revealed that stringent government policies relating to SMEs and lack of subsidies, and micro and market environmental challenges such as competition, inadequate finance, lack of equipment, limited enterprise spaces, and lack of business management skills have contributed to the stagnant process of SMEs growth. In conclusion, SME sector in Namibia has not flourished and met most expectations. Hence, the issue of lack of access to capital, inadequate entrepreneurial development, disabling regulatory environment as well as lack of effective competitive strategies pose serious challenges that require active government and private sector involvement if the huge potential in this sector is to be harnessed. Therefore, resolutions by both the private and public sectors to address these challenges should be sought. One such notable attempt is in the form of both private and public institutional arrangements to support SMEs by providing business management training. The central government must work hand in hand with the private sector financial services to curb the problems facing SME sector in terms of access to finance. Further studies are required to establish if the challenges faced in rural areas are similar to those faced by their urban counterparts.