The nexus between small and medium enterprises critical success factors and financial performance: evidence from Southern and Central African countries

The aim of this paper is to explore the nexus between the critical success factors (CSFs) of small and medium enterprises (SMEs) and the financial performance of SMEs operating in South Africa and the Democratic Republic of Congo (DR-Congo). To achieve this objective, a quantitative approach was employed, and the data were collected with a questionnaire consisting of closed questions, using a cluster sampling approach with only established SMEs being considered. In total, 464 fully completed questionnaires were retained for further analysis. The analysis was conducted with SPSS version 28. The findings from the regression analysis reveal a significant positive relationship between financial performance and market orientation, ICT adoption and management competency. The study was underpinned by resource-based view and contingency theories. From a theoretical viewpoint, the findings support the resource-based view by reinforcing the importance of a firm's internal capabilities, such as ICT, market orientation (customer and competitor) and management competency in achieving financial performance. From a practical viewpoint, the study has identified which CSFs should be prioritised to achieve high financial performance. As for contingency theory, the study demonstrates that financial performance is enhanced when strategies are tailored to local conditions. Practically speaking, the necessity of context-specific strategies rather than uniform approaches in different economic contexts is emphasised. These findings imply that all stakeholders involved in SME management should develop strategies to enhance ICT adoption, assist SMEs in improving their market orientation strategies and provide training to strengthen SMEs’ management competency, which can all further improve financial performance.