Major Challenges Facing Small and Medium-Sized Enterprises in Asia and Solutions for Mitigating Them

22 Pages Posted: 18 Apr 2016

See all articles by Naoyuki Yoshino

Naoyuki Yoshino

Asian Development Bank Institute

Farhad Taghizadeh Hesary

Waseda University

Date Written: April 18, 2016

Abstract

Small and medium-sized enterprises (SMEs) are the backbone of the Asian economy. They make up more than 98% of all Asian businesses that provide two out of three private sector jobs in the region. Therefore, it is vitally important for Asia’s economic success to have fully functioning support measures for SMEs. However, SMEs face challenges from limited access to finance, lack of databases, low R&D expenditures, undeveloped sales channels, and low levels of financial inclusion, which are some of the reasons behind the slow growth of SMEs. This paper focuses on four major reasons that slowed the SME growth in Asia including:

i) lack of finance,

ii) lack of comprehensive databases,

iii) low level of R&D expenditures, and

iv) insufficient use of information technology and provides remedies for mitigating them.

Keywords: SME databases, financial inclusion, SME investment, R&D expenditure

JEL Classification: G21, G24, G32

Suggested Citation

Yoshino, Naoyuki and Taghizadeh Hesary, Farhad, Major Challenges Facing Small and Medium-Sized Enterprises in Asia and Solutions for Mitigating Them (April 18, 2016). ADBI Working Paper 564, Available at SSRN: https://ssrn.com/abstract=2766242 or http://dx.doi.org/10.2139/ssrn.2766242

Naoyuki Yoshino (Contact Author)

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

Farhad Taghizadeh Hesary

Waseda University ( email )

1-6-1 Nishi-Waseda,
Shinjuku, Tokyo 169-8050
Japan

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