Emhamad Elmansori, Omar Al-Mukhtar University, Libya
Leslie Arthur, Nottingham Trent University, UK
Purpose: This paper aims to discuss the obstacles faced by innovation in SMEs in Libya. Libyan SMEs have relatively low value added, though they represent a significant portion of Libyan firms. According to previous research, SMEs are facing a financing gap that causes under-capitalisation and hinders economic growth. This paper also analyses the current situation of SMEs in Libya and addresses the question of whether the financing problem still exists.
Design methodology/approach: To meet this aim, the study undertook a snowball approach and distributed a designed questionnaire to the Libyan SMEs, after which 91 responses were obtained out of 400 questionnaires.
Findings: The findings of the paper show that access to external finance is still a significant factor for Libyan SMEs. Independent governmental bodies or business incubators that can facilitate access to funding from the relevant public and private sectors are recommended in order to close this financing gap.
Originality/value: Knowledge of the critical challenges faced by innovation in SMEs in Libya remains scant and incomplete. The authors believe that this paper has concluded with a number of recommendations that need to be adopted by the policy makers to help alleviate problems of the non-availability of finance to the SMEs sector.
Keywords: Small & Medium Enterprises, Innovation, Financing, Obstacles, Libya