Small Business Startup Funding for Youth Employment in Nigeria

Dr Nana A Akaeze,Dr Christian O Akaeze

doi:10.22158/jbtp.v7n1p35

Abstract

<em>Jobs are generated by initiating and growing small businesses within underdeveloped economies. Unemployment among youths is a critical problem confronting Nigeria (Nwogwugwu &amp; Irechukwu, 2015). Unemployment leads to less growth and a drop-in consumer spending. Increased unemployment generates lowered business output. Unemployment results in welfare loss from lowered output, income, and wellbeing which hinder social progress of nations. Nevertheless, unemployed youths with small business initiatives experience financial constraints and lack access to startup capitals. The purpose of this study was to explore experiences of some owners who succeeded despite lack of access to formal and informal sources of initial capitals. Data was collected through semi-structured interviews with 15 small business owners in Lagos who started as unemployed youths. We purposefully selected participants, used thematic for data analysis, NVivo 10 software for coding and interpretation. Findings revealed 3 critical challenges to access initial capitals for startups by unemployed youths including: (a) inability to provide collaterals, (b) Reliance on insufficient private finance and short term overdrafts, and (c) bureaucracy. Result may become basis for future interventions and support programs. Authorities and youth leaders could use information for trainings and support programs to help unemployed youth access startup capitals for small business.</em>

Highlights

Small businesses are driving force behind the economy and a significant employer of labor in many societies
Okun’s study in 1962 determined that when unemployment is reduced by 1% point, Gross National Product (GNP) increases by approximately 3% while a percentage increase in unemployment causes a 2% fall in Gross Domestic Product (GDP) (Abu, 2017)
Qualitative case study approach enabled us to describe how participants understood the problem of youth unemployment and Nigerian economy. 2.3 Data Collection Technique We used the flexibility of semistructured interviews to ask open-ended questions that facilitated exploration of issues which surfaced throughout interview sessions

Summary

Introduction

Small businesses are driving force behind the economy and a significant employer of labor in many societies Small businesses are important part of economic growth and development for both developed and developing economies. According to Okpara and Kabongo (2009), developing nations realize the significance of private businesses, for creating employment, and encouraging growth globally. Small businesses are a significant proportion of all businesses, creating remarkable number of jobs (Ghobakhloo & Zulkifli, 2010). The business sectors are dominated by small enterprises. Small business owners provide most employment opportunities along with significant earnings. Small business role in providing goods and services are significant within developing economies like Nigeria. According to Odunuga (2015), informal sector contributes about 57.9% of Nigeria total Gross Domestic Product (GDP).

Objectives

Methods

Findings

Conclusion