Journal of Business & Economic Policy

Factors Affecting Growth of Small and Medium Enterprises in Sri Lanka
Asini Udani Amaradiwakara, M. M. Gunatilake

Abstract
Small and medium scale Enterprises (SMEs) play an important role in promoting inclusive growth in the contemporary economy of Sri Lanka. However, the growth and expansion of SMEs are constrained by some unknown factors and those are yet to be revealed. Hence, the main objective of this study was to recognize the factors that influence the growth of SMEs in Sri Lanka. The present study was based on a sample of fifteen SMEs which may have positive or negative growth in sales. The stratified sampling technique was used to select an appropriate sample of SMEs. Among the selected sample of SMEs, two SMEs were selected for case studies. A questionnaire and informal interviews were the primary data collection methods used in this study. The correlation analysis and the Chi-square test were used to determine the possible influence of the factors on the growth of SMEs in Sri Lanka. The study revealed that the growth of SMEs is constrained by financial inadequacy, the lack of access to new technology, and some regulations imposed by the government. Moreover, it was revealed that the level of education of the owner of the enterprise has a direct impact on the growth of SMEs.

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