Factors Influencing The Performance Of Small And Medium Scale Enterprises (SMES): A Case Study Of Dormaa Poultry Farmers

Abstract

Interest in the role of SMEs in the development process continues to be at the forefront of policy debates in developing countries. The role of SMEs is crucial in the development process of many countries especially developing ones. About eighty percent of commercial poultry producers operate at small and medium scale levels with few large-scale activities in Ghana. Poultry production is one of the major agricultural activities in the Brong Ahafo Region of Ghana dominating in terms of the total poultry flocks as well as the production of broiler meat in the country. One district that has played a crucial role in this achievement is the Dormaa Municipality. The performance of this sector could boost the growth of the country through employment creation, meat and egg production, income generation among others. The experience of managers, level of education of managers, age of firm, size of firm, access to finance, extension contact among others have been viewed as critical elements that affect the performance of the poultry SMEs. Therefore, this study sought to evaluate the factors affecting the performance of SMEs by specifically focusing on the Dormaa Poultry farmers located in the Dormaa Municipality. The specific objectives were to; investigate the factors that influenced the performance of poultry farmers, examine whether there exist disparities in performance on the grounds of gender, formalization and association membership and the source of such disparities if they are established to be existing. The study used a secondary microeconomic panel data comprising of 155 farmers located in the cluster area. Descriptive statistics such as means, variations and demographic characteristics of the data were analysed and presented. The Pooled OLS and the Within Effect estimator were used to determine the factors that affected the performance of poultry farm in the Municipality. Weekly sales was adopted as a proxy for performance. The results from the two models revealed a significantly positive relation between association membership and performance. Also, size, as well as formalization of farms, had a positive relation with performance. However, there existed a negative relation between the level of education of managers and performance. In order to achieve the second and third objectives, the Blinder-Oaxaca decomposition was employed. The results showed that there existed some form of discrimination coming from Association membership and formalization flowing from the unexplained components. There wasn’t any support for gender discrimination. The study recommends policies aimed at persuading farmers to join membership organizations and encourage the registration of farms to enjoy the benefits and advantages resulting from such affiliations and formalization status.