By Mohamoud Mohamed Duale, Phelista Wangui Njeru and Grace Karamuta Karemu
Small and medium enterprises are the major agents of economic growth and employment in Somaliland. 34 out of the 72 small and medium enterprises have closed down between 1996 and 2012 due to the many challenges they face (UNDP, 2012). The aim of this research was to establish the challenges facing SME’s performance at Gobanimo market in Hargeisa-Somaliland. The specific objectives of the study was to investigate the relationship between accounting skills and performance of SMEs, and to examine how accounting skills possessed by entrepreneurs influences the performance of SMEs. The research reviewed Contingency theory and Capital Theory. The empirical review centered on the accounting skills, government policies and strategies contributing to SME challenges. The research used descriptive research design. Sampling frame used was obtained from the local authority on which Gobanimo Market is operating. The research targeted the population of 1250 registered SMEs in Gobanimo market. 303 respondents formed the sample of the study which was picked by using simple random sampling technique. Both primary and secondary data were used in this research.
Primary data was collected by aid of a questionnaire while secondary data was collected from already published sources. A pilot study of 3 respondents was used to test reliability of the instrument. Validity and reliability tests were executed on the data collected. Data was analyzed by use of regression model and SPSS.