Business climate and sustainability of Cameroonian small and medium enterprises in times of COVID-19

Abstract

Purpose

The purpose of this study is to evaluate the contribution of the business climate on the sustainability of Cameroonian small- and medium-sized enterprises (SMEs) in times of coronavirus disease 2019 (COVID-19).

Design/methodology/approach

To achieve this purpose, the study proceed with a quantitative analysis using the simple LOGIT model on a sample of 52 individuals.

Findings

Through the administration of questionnaires and estimations, results reveal that certain variables such as the taxation regime of the enterprise, the different types of taxes paid by the enterprise, the frequency of payment of income tax, the nature of the training of managers, the clauses of the debt contracts with banks/EMFs (Microfinance institution), the time taken to apply for a loan from the bank and the nature of the manager’s training have a negative influence on the sustainability of Cameroonian SMEs during COVID-19, while others such as the evolution of financial profitability in the context of the coronavirus pandemic in Cameroon, the company’s sector of activity and the main methods of financing the SME have a positive influence on the sustainability of Cameroonian SMEs during COVID-19 pandemic. The improvement of the business climate by the institutional authorities is, therefore, essential in the perspective of an eventual development of the country; the said development cannot take place without capitalizing on the potential for income and job creation by SMEs.

Research limitations/implications

The first limitation is related to the size of the sample and also to the specificity of our study. In fact, the study is conducted among individuals/actors likely to have access to information on the business climate and sustainability of Cameroonian SMEs at the time of COVID-19 encountered in the city of Yaoundé. In this context, the sample size is considered to be small (52). This element does not immediately allow the results of the present research to be generalized to all regions where SMEs are located in Cameroon, as other criteria or other elements must still be taken into account and the results obtained must, therefore, be interpreted with caution. This research could be deepened in the future by considering more business climate variables on the one hand and a larger sample size extended to all cities in Cameroon on the other.

Practical implications

The results of this research confirm the importance of institutional bodies establishing a rigorous policy of support for businesses. Such a policy would contribute to improving the business climate and extend beyond mere resilience.

Originality/value

The originality of this study lies in the fact that it looks at the sustainability of SMEs in the context of the COVID-19 pandemic in Cameroon using a simple LOGIT econometric model.

Citation

Djeudja, R. and Salamon, Y. (2023), "Business climate and sustainability of Cameroonian small and medium enterprises in times of COVID-19", African Journal of Economic and Management Studies, Vol. 14 No. 3, pp. 399-419. https://doi.org/10.1108/AJEMS-05-2022-0214