A comparative study of the financial problems faced by micro, small and medium enterprises in the manufacturing sector of Fiji and Tonga

Abstract

Purpose

Globally, there is an increased recognition of the important role played by micro, small and medium enterprises (MSMEs) in the economic development of a country. Similarly, in the South Pacific region, MSMEs is the main engine behind the economic growth. In particular, MSMEs is one of the biggest contributors to GDP, employment and plays a core role in the supply chain of large businesses. One of the major problems faced by MSMEs in South Pacific Island countries is a lack of finance to advance business growth. Against this backdrop, the purpose of this paper will be to examine the financial obstacles faced by MSMEs.

Design/methodology/approach

The main objective of this study is to explore the financial obstacles faced by MSMEs in the manufacturing sector of Fiji and Tonga. In particular, this research tries to evaluate the severity of the impact of each of the financial obstacles on the growth and survival of MSMEs in Fiji and Tonga.

Findings

The research involved conducting a survey of 200 MSMEs in Fiji and Tonga. The study concluded that financial problems faced by the MSMEs could be divided into three broad categories: financing problems; operational and administrative problems; and sales and debtors problems. The 19 financial obstacles tested in this research falls under these broad categories.

Originality/value

This research is original and highly value to a wide range of readers. Scholars, practitioners, aid donors are widely interested to understand the status of MSMEs in Fiji and Tonga. Research of this nature has never been conducted in Fiji.

Citation

Naidu, S. and Chand, A. (2012), "A comparative study of the financial problems faced by micro, small and medium enterprises in the manufacturing sector of Fiji and Tonga", International Journal of Emerging Markets, Vol. 7 No. 3, pp. 245-262. https://doi.org/10.1108/17468801211236974