infrastructure and business services and the use of tools such as professional market research findings, advisory services, marketing assistance and training for SME growth. Business development services have also been identified as the most needed competitiveness improving services by SMEs in developing countries.<sup>16</sup> Given the recognized importance of these practices, in our analysis, we use a combination of business development and financial planning measures to create two indices as proxies for business success for SMEs in our sample.

**Access to finance has been identified as a key element for SMEs to succeed.** Financial resources are crucial for SMEs in their drive to build productive capacity, to compete, to create jobs, and to contribute to poverty alleviation in developing countries.<sup>17</sup> Finance has been identified in many business surveys as the most important factor determining the survival and growth of SMEs in both developing and developed countries. Access to finance allows businesses to undertake investments to expand their operations and improve their competitiveness. In this paper, we proceed to use access to finance as another indicator to measure business development of the SMEs in our study.

**Adoption of formal HRM policies is linked to improvement of business development outcomes and to the creation**

**of an enabling business environment.** It has been shown that the adoption of formal family-friendly policies promotes business development, and improves productivity, job satisfaction, and employee retention (Bin Bae and Yang, 2017 and Born, 2015). A UNICEF report (2019) presents evidence that manufacturing workers in Bangladesh and Vietnam are more likely to be retained in workplaces that implement family-friendly policies and shows results from a study in China which found that HRM policies were an important factor that increased trust in management and overall employee retention—by reducing the cost of staff absenteeism and turnover, they would increase business performance by increasing productivity (IFC, 2019). At a global level, it has been shown that the adoption of HRM policies is positively correlated with business development, organizational performance and firm productivity (Bloom, Kretschmer and Van Reenen, 2011, Jones, Kalmi and Kauhanen, 2006, Arthur and Cook, 2004 and De Kok and Uhlaner, 2001), including for smaller businesses (<100 employees) (Sels, De Winne, Delmotte, 2006). Shafeek (2016), studies the impact of HR policies in SMEs (ranging from micro-firms, <10 employees to large firms with over 250 employees), in the context of Saud Arabia. He finds that the adoption of these practices positively affected SME performance regardless of size. Naz et al., (2016) and Yordanova, (2011), in their studies in Pakistan and Bulgaria, provide further evidence supporting this finding.

Overall HRM policies are conducive to business growth, improved productivity, employee retention, and a reduced gender gap due to higher female employee retention, even when looking at small firms. In our study, we are going to evaluate whether the adoption of informal employee practices has a similar impact on different measures of business development and access to finance. Further, given that evidence points to formal family-friendly policies being beneficial in reducing gender barriers, we proceed to test whether a similar story can be told in our context.

> 16 A survey conducted in Tanzania indicates that micro and small enterprises perceived training in bookkeeping, financial services, marketing and sales promotion, training in costing and pricing and transport services as the most needed competitiveness improving services for their businesses. BDS market survey conducted by Swisscontact 2003.

> 17 Improving the competitiveness of SMEs in developing countries. The Role of Finance to Enhance Enterprise Development, UNCTAD, 2001.

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