Obstacles to Small and Medium Enterprises in Pakistan. Principal Component Analysis Approach

The study investigates the obstacles face by Small and medium enterprises in Pakistan. The Principal source for collecting data was the questionnaire survey. The data was collected from 107 SMEs firms located in Islamabad and Rawalpindi region. A principal component analysis approach was used to rank the highest and lowest obstacles factor for doing business in SMEs sector of Pakistan. Among six major obstacles, "Financial constrains" was raked highest whereas the second highest ranked obstacles was "corruption" The other obstacles respectively determined by the principal component analysis included "social and technological obstacles, Training obstacles, Management and Infrastructure obstacles". Hope so, the findings of the study will have practical implications for policy maker to overcome major obstacle for SME sector in Pakistan.