Sardar Naeem Hakimzai

Abstract

 

Small business enterprises (SBEs) are considered a significant body in both developed and developing countries. They produce goods and services which help to increase economic development and contribute significantly to the creation of employment. Although SBEs play an important role in economic development and employment, their operations are often crippled due to the lack of sufficient financing from financial institutions. The key purpose of this research was to examine the effect of bank loans on fostering small business in Kabul, Nangarhar, Heart, and Maidan Wardak provinces of Afghanistan. In this study, both qualitative and quantitative research designs were used. The study used a sample of 100 SBEs. The primary data were collected through structured questionnaires. Secondary data from SME records were used in the research. The data was analyzed using descriptive statistics as well as inferential statistics such as ANOVA, correlations analysis, a Heteroskedasticity test, the Ramsey RESET test for functional misspecification, and multiple regressions. The results of the study revealed that business opening time, bank loan, and the number of workers had significant effects on sales made by SBEs. Furthermore, new machinery had a direct but insignificant impact on sales of SBEs in 2015.

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