Challenging the Challenges of Small and Medium Scale Enterprises in Nigeria: New Perspectives

Abstract

This paper attempted to investigate how to solve the challenges confronting Small and Medium Scale Enterprises (SMEs) in Nigeria. The SMEs, the world over, has been recognized as the engine and catalyst for growth and development for any economy. And despite this unique and important role they play they have continued to experience persistent challenges to their survival in Nigeria.The objectives of the paper are to examine why Small and Medium Scale Enterprises cannot access the needed funds for their operations from the Nigerian financial system, Investigate the factors responsible for lack of adequate human capacity development required for their sound operational and developmental needs and evaluate the various policy initiatives put in place by government to improve the performance of Small and Medium Enterprises.In line with the design of the study, primary data were collected through the use of questionnaires, and regression analysis was used to analyze the data. The findings of this study revealed that there is positive relationship between the growth and development of SMEs and adequate provision of required funding from financial institutions through subsidized funding and credit schemes provided at favourable interests. The paper recommends among other things, that the Central Bank of Nigeria (CBN) should encourage the Nigerian banks to play active part in the funding of Small and Medium Enterprises at reasonable rates, and government should develop a lasting solution to the state of infrastructural deterioration especially, the provision of regular electricity supply amongst others, to enable SMEs bring down their operational cost and contribute their quota to the economy.