The influence of market-driven strategies and access to finance on competitive growth of small and medium-sized enterprises in selected districts of Lesotho
Year: 2020
Type: dissertation
Study design: Observational Study
Abstract: Small and medium enterprises play a significant role in the economic growth of Lesotho, however, they face low survival rates and competitive growth drawbacks. Market-driven strategies and access to finance have been identified as the major constraints hindering their survival, growth and effective operation in Lesotho. The purpose of the study was to investigate the influence of market-driven strategies and access to finance on the competitive growth of small and medium-sized enterprises in selected districts of Lesotho. \nA quantitative descriptive-correlation survey approach was followed in the data collection and the analysis phases of the research study. The target population consisted of a probability sample of (N = 400) entrepreneurs in the four selected districts of Lesotho. The data was captured and analysed for descriptive statistics, convergent and discriminant validity, composite and internal reliability and correlation in order to inform the structural equation modelling (SEM). SEM was used to test the research model and hypotheses to answer the research questions. The correlation analysis revealed a positive significant relationship between the market-driven strategies and access to finance constructs and related to the competitive growth of SMEs. The regression results showed a positive and significant influence of market-driven strategies (technological dynamic and competitive intensity) and access to finance (collateral requirement and financial information access) on the competitive growth of SMEs. The structural equation modelling analysis further indicated that the equation model derived from the covariance estimates of all explanatory factors of market-driven strategies and access to finance on competitive growth were within the goodness-of-fit threshold. \nThe study was specific to small and medium enterprises, and the findings suggest that to address their challenges in Lesotho (i) enterprises need to be equipped with market-driven strategic (competitive intensity and technological dynamic) resources to deliver superior value to customers; and (ii) adequate policy initiatives are needed to improve enterprises’ access to finance, and such should (a) focus on improving access to financial information through awareness programmes, (b) consider adequate information on policy initiatives, support programmes and financial schemes geared to support Basotho small and medium-sized enterprises access to finance, and (c) harmonise the collateral requirements by banks to ease Basotho SMEs access to adequate credit funds. In sum, the results suggest the joint implementation of market-driven strategies and access to finance as enabling resources to assist enterprises to achieve and stay competitive in the current dynamic business environment.
Author: Amadasun, Donald Edes Osakpamwan
Language: English
Topic: Firm Innovation and Growth
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3129460622