International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

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 Volume 10, Issue 11 (November 2023), Pages: 184-189

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 Original Research Paper

Banking sector development and financial performance of small and medium enterprises in Mogadishu, Somalia

 Author(s): 

 Abdikarin Ahmed Abdi 1, *, Fatima Mohamed Hussein 1, Hanita Bint Kadir Shahar 2

 Affiliation(s):

 1Faculty of Management Science, Simad University, Mogadishu, Somalia
 2School of Economics, Finance and Banking, University Utara Malaysia, Kedah, Malaysia

 Full text

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 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0001-9967-0546

 Digital Object Identifier (DOI)

 https://doi.org/10.21833/ijaas.2023.11.023

 Abstract

This study attempts to establish the relationship between banking sector development and the financial performance of small and medium enterprises in Mogadishu, Somalia. Financial intermediation theory is adopted to explain this relationship. The study adopted a correlational research design with 55 SMEs operating in Mogadishu city, Somalia. These SMEs were purposively selected. The study adopted a census, and thus, all the SMEs were included in the analysis. Due to the unavailability of secondary data in Somalia, the study relied on primary data, for which questionnaires were carefully designed using the existing scales and available literature. This questionnaire was then administered to the respondents who shared their responses and were analyzed. Before collecting information from the respondents, the study adopted the questionnaire in the pilot testing stage to ensure that it was reliable and valid. The main analysis for this study includes means and standard deviations (descriptive statistics) and correlation and regression analysis. The results were that access to credit (p<0.05), bank deposits (p<0.05), and customer savings (p<0.05) were all significant predictors of increase in profits and stability of sales. The study concludes that banking sector development is a significant predictor of the financial performance of small and medium enterprises.

 © 2023 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords

 Banking sector development, Financial performance, Small and medium enterprises, Correlational research design

 Article history

 Received 18 May 2023, Received in revised form 18 September 2023, Accepted 6 November 2023

 Acknowledgment 

No Acknowledgment.

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

 Abdi AA, Hussein FM, and Shahar HBK (2023). Banking sector development and financial performance of small and medium enterprises in Mogadishu, Somalia. International Journal of Advanced and Applied Sciences, 10(11): 184-189

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 Figures

 Fig. 1  

 Tables

 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 

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