Abstract
Purpose The purpose of this study is to assess the role of small and medium-scale enterprises (SMEs) as a catalyst to all things good in great economies; however, sadly, Nigeria has been unable to unlock SME development and the many benefits. The paper’s examination revolves around SMEs and entrepreneurial development, employment generation, government policies and financial aid and its availability. With the intention of establishing the relevance of government role in creating vibrant economies via thriving SMEs and its ripple effect on employment generation. Design/methodology/approach The study adopts a survey design, using a questionnaire for data gathering and percentile, confirmatory factor analysis (CFA) and structural equation modelling (SEM) for data analysis. Findings The study established a significant direct relationship between entrepreneurship development and infrastructure development and employment generation. Also, there was a significant direct relationship between government policies and infrastructure development. However, surprisingly, there was an insignificant relationship between government policy and financial aid and accessibility. Practical implications The government’s role in SMEs’ survival and entrepreneurship development is invaluable. The government must live up to their bidding and create an enabling environment to promote SME and entrepreneurship growth. Only this will transform the economy and minimize unemployment to its barest minimum. Originality/value The study’s research model is an interesting contribution to the body of work in SME and entrepreneurship development. The study is also an original attempt at having a good representation of the South-Western part of Nigeria, as research in high impact journals is usually domiciled in one state.
Highlights
Small and medium-scale enterprises (SMEs) were classified as essentially backward and inimical to the overall economic development of Nigeria for decades (Sokoto and Abdullahi, 2013)
The study findings show that Nigerian infrastructural development contributes positively to entrepreneurship development and aligns with Galv et al (2018) and negates findings from Bruton et al (2013)
This study shows a positive relationship between government policy and Nigerian infrastructural development, but a negative relationship with small and medium-scale enterprises (SMEs)’s financial aid and accessibility
Summary
Small and medium-scale enterprises (SMEs) were classified as essentially backward and inimical to the overall economic development of Nigeria for decades (Sokoto and Abdullahi, 2013). SMEs serve as a catalyst to entrepreneurship, enhanced employment opportunities and stable economic development. Their geographical spread mitigates rural-urban migration and resource utilization (Chima, 2013) and by producing intermediate products, SMEs contribute to industrial supply chains. What constitutes an SME differ among studies Several indicators such as profits, total capital, market position, number of employees and turnover are considered. Being a Nigerian study, this paper adopts the SMEs development agency of Nigeria (SMEDAN) National policy definition; which states that firms between 10 and 199 employees are small (10–49 staff with assets between N10 and N99.99 million) or medium-scale (50–199 staff with assets between N100 and N999.99 million) (SMEDAN, 2015)
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