CHAPTER II. LITERATURE REVIEW AND DOCUMENTATION
2.1. Introduction
This chapter broadly aims to review the existing literature to
arrive at conceptual understandings. It expands on the definitions of the key
terms according to different authors and these include: economic development,
and small and medium enterprises and their assessment.
It is logical that most of developing countries should be
seeking to industrialize on the basis of their agricultural production. The
output of crops and livestock is both their main source of wealth and their
most obvious raw materials for industry.
In many important cases, products which were formerly
exported in their primary state are now being processed in varying degrees
before shipment, so that the national economy gains the value added by
processing.
In other instances, locally processed products are being sold
on the domestic market as substitutes for imported goods. In both cases, the
implication for a country's balance of trade can be highly important. At the
same time, the new processing industries help to make more effective use of
labor, and thus reduce unemployment.
Major processing projects have significant linkage effects by
promoting new business for service companies, transporters, traders and various
others who are affected by its operations. Finally, there may be welfare
benefits, such as the improvement of public nutrition that should follow the
successful establishment of a milk plant. Although the importance of
stimulating agricultural processing industries on these grounds is well
appreciated, there is not always a full understanding of the marketing and
economic factors which vitally affect the success or failure of a project. It
is a particular feature of most agricultural processing that the value added by
the process is low in relation to the value of the primary commodity and the
other modality used (Clotilde MUKAMUGANGA, 2011 page 14).
This chapter presents the definition of key concepts, the
general overview of SMEs, the preferred policies and objectives, need for
development of SMEs, the tenth elements required for SMEs from ISO, advantages
of SMEs, limitations of small business and the main causes of failure. The
overall purpose of this chapter is to identify and assess the gaps that this
study will fill and contribute approaches to the better performance of a
sustainable economic development of Rwanda.
2.2. Literature search
A comprehensive literature search of published academic, peer
reviewed professional literature using a variety of databases including journal
articles, conference papers, books, dissertations and technical papers, both
published and unpublished, was conducted. The main sources included libraries
both public and university (University of Rwanda-Huye Campus) libraries and the
internet sources of information.
Literature reviewed included:
i. Published journal articles, working papers and other
theoretical publications on SMEs access to credit;
ii. Papers/articles found on the websites for economic
development, development policy of SMEs in Rwanda, banks and other funders;
and
iii. Papers/articles found on the websites for credit
regulators and SME advocacy organizations.
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