Financing of Small and Medium Manufacturing Entities (SMMEs) in the Sub-Region (Africa): A Contribution to Economic growth

Abstract

Introduction: Small and medium-sized businesses spur both developed and developing nations' economies. African nations that need their economies to grow steadily must focus on the SMME sector and take advantage of its enormous potential to produce employment, better local technology, output diversification, developed indigenous entrepreneurship, and forward integration with large-scale industries.

Objective: The goal of this study is to review the financing of small and medium manufacturing entities in Africa and how they contribute to economic growth.

Method: 30 reviewed and published articles from online research journal websites such as science direct, research gate, sci-hub, PubMed and google scholar was used to generate this research paper.

Results: Obtaining financial backing for small and medium industrial enterprises in Africa is extremely difficult due to factors like constrained loan availability, a lack of collateral, and excessive interest rates. Reduced productivity, limited job growth, and lower competitiveness are the results of this. Financial resources are available to government programs, commercial banks, and microfinance organizations, but their scope and reach are constrained.

Conclusion: SMMEs are crucial to the development of the African economy, and policymakers must improve the financing environment for them by fostering private sector investment, reforming tax and regulatory policies, and fostering greater communication between financial institutions and SMMEs to better understand their financing requirements and offer individualized solutions.