Determinants of Business Productivity Among Micro, Small and Medium Enterprises in Rwanda: A Structural Equation Modeling

Abstract Purpose: The study sought to analyse the determinants of business productivity among Micro, Small and Medium Enterprises (MSMEs) in Rwanda. The productivity of MSMEs is still a major challenge in Rwanda, where most of the MSMEs do not exceed five years of existence. Methodology The study adopted a quantitative approach where primary data was collected using a closed-ended questionnaire administered to 399 business owners/managers. Structural equation modelling was used to test the determinants of MSMEs' productivity in Rwanda. Findings Data collected from the survey indicated that there is a significant relationship between physical, human, technological resources and productivity of micro small and medium enterprise. The results further highlighted that stakeholder relationship, reputation, information, marketing skills entrepreneurship practices and business productivity. Originanlity and Value The current study contributes to the current literature by highlighting the determinants of both the tangible and intangible resources that enhance the productivity of MSMEs which can help policymakers to design policies to improve the productivity of MSMEs. JEL: M`13