Mitigating the Challenges of Small and Medium Enterprises in Nigeria

Babandi Ibrahim Gumel

doi:10.33215/sjom.v2i3.129

Abstract

Purpose- The purpose of the paper is to provide owners and managers of small businesses with necessary information about the challenges facing small businesses in Nigeria and present the possible tools, policies, and strategies to mitigate them. Design/Methodology- Using the multi-case qualitative study, managers of successful small businesses narrated in an interview the tools, policies, and strategies they used to mitigate the identified challenges. The study answered the central question: what are the tools, policies, and strategies used by managers of successful small businesses to mitigate the challenges facing their firms? Findings- The findings identified continuous government intervention and support to small businesses as a major tool that reduced the challenges facing the sector. Practical Implications- The information found in this study can be used by small business managers to mitigate the challenges facing small businesses and reduce their massive failure in the economy. Mitigating the challenges facing small businesses in Nigeria will increase the number of successful small businesses, which will result in the reduced unemployment rate in the economy. A reduced unemployment rate in the Nigerian economy will increase the wellbeing of citizens, thereby reducing the unemployment rate in the economy.

Highlights

The economic development institutions in Nigeria’s economy recognized the importance of micro, small, and medium enterprises: most importantly, being the largest segment of the economy
The information found in this study can be used by small business managers to mitigate the challenges facing small businesses and reduce their massive failure in the economy
Mitigating the challenges facing small businesses in Nigeria will increase the number of successful small businesses, which will result in the reduced unemployment rate in the economy

Summary

Introduction

The economic development institutions in Nigeria’s economy recognized the importance of micro, small, and medium enterprises: most importantly, being the largest segment of the economy. Economic development institutions that regulate the economic activities such as the central bank of Nigeria (CBN) and small and medium enterprises development agency of Nigeria (SMEDAN) are institutions that regulate and support the development of the country’s economy and are of the view SME’s provide employment opportunities to citizens. A study by the researchers suggested that small and medium enterprises employ more than 80% of Nigeria's workforce (SMEDAN, 2013). Another study found that 97% of Nigeria’s economy to be small and medium enterprises, and job opportunities provided by SMEs in the country is at 70% mark Recent studies show that the unemployment rate is at its highest

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