The Growth Prospect and Challenges of Financing Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria

Abstract

This study identifies the growth prospect of financing Micro, Small and Medium Enterprises (MSMEs) in Nigeria and the challenges that constitute a hindrance to the growth of MSMEs in Nigeria. This study employed descriptive analysis, simple percentages and deductive method to describe the growth prospect of financing MSMEs and the problems experienced by the MSMEs. It was found that the growth and survival of MSMEs are still hampered by inaccessibility to funds owing to different reasons and challenges. The chief among the challenges is that financial institutions look at many MSMEs as high risk debtors without credit worthiness. The key finding of this study is that the financial support in term of loans given to MSMEs by the financial institutions has been declining continuously over the years and this hamper the growth prospect of MSMEs. The Federal Government should formulate policies that would encourage MSMEs to begin to source funds from the capital market through the introduction of the third-tier security market since there is an increasing growth in the number of MSMEs in Nigeria.