Abstract
This research paper summarizes the arguments and counterarguments within the scientific discussion on the Small and medium scale enterprises constitute the backbone of any nations economic development and had remained a major contributor in poverty alleviation, employment generation, and industrialization. The purpose of this phenomenological study was to explore the lived experiences of small and medium scale enterprise owners in the development country, regarding the raising of finances from lending institutions to ensure their business growth and sustenance. A phenomenological qualitative approach for this study as it empowers the researcher to investigate the lived experiences of participants to gain a deep understanding of the small number of participants who had raised funding from financing institutions and how to improve their experiences thereby reducing the challenges while seeking for financing. The relevance of this scientific problem discussion from the organizational life cycle theory and working capital management theory to emphasize the concept of study environment, financing institutions, knowledge, and experience of small business owners. Key findings emerged that within the business environment, there are lack of government policies to support small businesses, and financing institutions are not favorably disposed to support small and medium scale business. The wide-ranging factors discussed in this article also brought to fore additional financing strategies adopted by small businesses as alternatives to banks funding, the effect adequate funding will have their operations and the improvement required by government, financing institutions and owners of small businesses to support the growth and development of small businesses. The results of the research study may contribute to positive social change by creating awareness amongst small and medium scale business owners on the best financial strategies to fund their operations to remain profitable and sustained. The research study highlighted the need for both the government and financing institutions to support small businesses to function effectively to remain relevant, continue to generate more employment, improve the living standard of the owners of small business, and ultimately impact development country at large. Finally, this study added to the existing literature on small and medium scale enterprises financing strategies, their challenges, and their means to ameliorate the difficulties experienced by their owners when seeking for funding from lending institutions.
Highlights
Small and medium scale enterprises are mostly heterogeneous
According to Taiwo et al (2018), Small businesses constitute more than 50% of all firms outside of professionals, creating substantial employment and a significant source of earnings
An amalgamation of focused training that will develop small business owners' experience, and financial literacy sufficient to guide them in loan applications, will be of immense help to combat the challenges of lack of finances
Summary
Small and medium scale enterprises are mostly heterogeneous. They comprise a mix of business activities ranging from craftsmen and women operating in their local environments, software and engineering firms, and mediumsized businesses that produce domestic and foreign markets. Small and medium scale enterprises' contributions to the nation’s economic development have increased researchers' focus to explore critical factors to build and maintain the success of small businesses (Alfoqahaa, 2018). Small and medium scale enterprises financing is a way to provide the required funding to expand small businesses.
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