Research and policy notes RPN 1-19 : March 2019 : impediments to SME growth in small island developing States - the case of the Maldives

Abstract

Small and Medium Enterprises (SMEs) play a vital role in the Maldivian economy, owing to its substantial contribution to improve the livelihood of small island communities through the creation of employment opportunities. However, as a Small Island Developing State (SIDS), SMEs in the Maldives face various challenges due to its unique geographical nature. Therefore, this paper examines these factors using a cross-sectional dataset. Among the many factors that affect the growth of SMEs, the results indicated that financial inclusion, under-developed transport infrastructure and limited economic activities are the key impediments to SMEs growth in the country.