Financing constraints and competitiveness of SMES in Cameroon

Abstract

SMEs represent more than 95% of Cameroon's economic fabric and contribute 61% to job creation. However, access to finance is one of the major obstacles to their development. The objective of this article is to measure the influence of financing constraints on the competitiveness of Small and Medium-sized Enterprises (SMEs) in the western region of Cameroon. Attain that objective means to identify the financing constraints faced by SMEs in Cameroon and then to explain the nature of the relationship between these constraints and the competitiveness of SMEs. The sample of this study consists of 61 SMEs located in the West Cameroon region. From the SPSS 20 software, a multinomial regression was performed to measure the influence of each constraint on the competitiveness level of SMEs. The analysis shows that: interest rates, cash flows, managerial level and self-financing are indicators of financing constraints that significantly influence the level of competitiveness of SMEs in the region of West Cameroon. This study recommends to those SMEs to exploit better their human capital to conduct research and development works, in order to increase their competitivity.

JEL classification: M13, M21, G32

Paper Type: Empirical Research