Small And Medium Scale Enterprises In Nigeria Research Articles

Effect of Bootstrapping dimensions moderated by Cost of Doing Business on Performance of Small and Medium Scale Enterprises (SMEs) in South-West, Nigeria

The role Small and Medium Scale Enterprises (SMEs) can never be overemphasised in the has economic drivers in either developed and developing countries of the world. However, contract to immense contribution of SMEs to nation economic growth, most SMEs in Nigeria struggle to survive beyond five years due to poor performance. The major challenge SMEs in Nigeria include developing creative ways of acquiring resources in non-traditional ways cum cost of doing business which to greater extent affect SMEs performance. Thus, this study investigated the effect of Bootstrapping dimension moderated by cost of doing business on the performance of Small and Medium Enterprises in South-West, Nigeria. The study adopted survey research design and the population of the study comprised 14, 527 owner/managers of small and medium scale enterprises (SMEs) enterprises in Lagos and Oyo States. The study utilized stratified simple random sampling technique with a sample size of 750 owner/managers of SMEs determined using Cochran’s (1977) formula and data were analyzed using regression analyses. The findings revealed that cost of doing business (β = 0.003, ΔR2 = 0.021, ΔF = 14.820, p < 0.05) significantly moderated the effect of bootstrapping measure by owner’s financing, subsidy financing, delayed payment, joint utilization, and social capital on the performance of SMEs in South-West, Nigeria. The study concluded that bootstrapping improved performance of SMEs in South-West, Nigeria, cost of doing business significantly moderated effect of bootstrapping on the performance of SMEs in South-West, Nigeria. It was recommended that management of small and medium scale enterprises in South-West, Nigeria should pay more attention on subsidy financing, delayed payment, social capital with less attention on joint utilization in order to improve their performance. Keywords: Cost of Doing Business, Delayed Payment, Joint Utilisation, Owner Financing SME Performance, Social Capital, Subsidy Financing

Impact of Covid-19 Pandemic on the Financial Performance of SMEs in Nigeria: A Study of the South East Geopolitical Zone

This article explores the impact of the Covid-19 pandemic on the financial performance of small and medium-scale enterprises (SMEs) in the South East geopolitical zone of Nigeria. The study objective was to determine the extent to which the Covid-19 pandemic affected the revenue of SMEs, their profitability and their access to credit. The target population for the study were registered SMEs in the South East geopolitical zone of Nigeria, being Abia, Anambra, Ebonyi, Enugu and Imo. Using purposive sampling method, thirty SME owners from each zone were selected for the study, giving a total of 150 SME owners. The study adopted a quantitative research method, using a questionnaire. The findings revealed that the Covid-19 pandemic significantly reduced the profitability and revenue of SMEs but not their access to credit. The study therefore recommended the need for business owners to minimize cost and look for possible innovations/opportunities to grow sales and improve revenue. Also government should make soft loan available to SMEs to help cushion the effect of the pandemic on their financial performance. Finally, future research should consider other related variables that have not been covered in this article.

Conceptual Model for Assessment of the Use of ICT among Small and Medium Scale Enterprises (SMEs) in Oyo State, Nigeria

Purpose Small and medium enterprises (SMEs) have emerged as promising opportunities to eliminate and reduce unemployment globally, and at the same time, brought about increased levels of technological advancement which has equally revolutionized the dynamics of the business terrain. Contrarily, many SMEs in Nigeria are not utilizing ICT due to some major barriers as identified in the literature. To this end, this study aims to propose a conceptual model for assessing the influential factors of ICT use among the SMEs. Design/methodology/approach To complement this, a survey was conducted in Oyo South Senatorial district of Oyo State, Nigeria. A total number of Seventy-three (73) SMEs operators were randomly selected as the sample size. The descriptive statistics which includes frequency counts and percentages were used to describe the sample and to assess ICT use. Regression analysis was used to assess the relationship and influence of technology, organization and environment characteristics on use of ICT. Findings The findings revealed that ICT use has significant positive relationship with the constructs of the TOE Framework. the TOE Constructs also have joint influence on the use of ICT by the SMEs. Discussion of findings, summary and conclusion along with research contribution were also presented in this study. Originality/value The Technology, Organization, and Environment (TOE) framework has been widely used in examining the factors influencing IT adoption generally, but few studies have attempted to use this framework to measure ICT use among the SMEs.

The Impact of Finance to Sustainability of SMEs in Post COVID-19 Pandemic in Nigeria

The outbreak of coronavirus disease (COVID-19) has severely affected the global and Nigerian Economy. The most affected victims of the pandemic are the Small and medium scale enterprises (SMEs). This study aim to explore the role of finance in sustainable operations of SMEs in Nigeria post COVID-19 pandemic. The study shall adopts a quantitative approach where questionnaires are distributed to SME owners and managers in the Northeast region of Nigeria. A total sample of 384 SMEs are expected to participated in this study. The Dataset collected for the purpose of this study is expected to be analysed using both binomial and T-test. The data collected revealed that finance plays an important role in the sustainability of business in the sampled area. Based on the findings, it is recommended that government should provide means of tacking the funding challenges faced by SMEs through provision of infrastructure and loan facilities. Finally, the business owners should equally focus on wealth and profit generation, bearing in mind other social and environmental concerns.

Exploring Entrepreneurial Orientation (EO) and Performance among Small and Medium Scale Enterprises (SMEs) In Nigeria

This research is designed to examine the influence of entrepreneurial orientation (EO) on performance of Small and Medium Scale Enterprises (SMEs). The study was carried out in the South-South Geopolitical Region of Nigeria. The proxies for EO were innovativeness, risk-taking, proactiveness, autonomy and competitive aggressiveness. This study used a survey research approach and a sample size of 1308 SMEs was selected. Copies of an adopted questionnaire were administered to the respondents who were owners/managers of the selected SMEs using the stratified random sampling method. Pearson's correlation analysis and hierarchical multiple regression analysis were used to analyze the data collected. The result of the research revealed that entrepreneurial orientation (EO) has significant influence on performance of SMEs in Nigeria. Consequently, it was recommended that SMEs' owners/managers should use the EO dimensions that best suit their firm's strategic emphasis, taking into account aspects such as the organization's age and/or size, industry influence, and the specific setting in which the firm works.

Underpinning Hawley’s Risk Theory of Profit on Risk Intelligence and Sustainability Relations of SMEs in Nigeria

Sustainable development is one of the topical issues posing a global challenge to the business world. To remain successful in today's competitive business environment, Small and Medium-Scale Enterprises (SMEs) must find a way to exist by adapting to dynamic sustainability challenges. The study aimed to examine Hawley’s Risk Theory of Profit's underpinning role in explaining the connection between Risk Intelligence (RI) and SMEs’ sustainability (SUS). It was understood that risk could pose both opportunities and threats to business, and therefore, proactive detection is paramount to address the risk capable of ridiculing sustainability. Therefore, we proposed integrating the moderating role of financial performance in the relationship between Nigerian SMEs' risk intelligence and sustainability. The study found Hawley’s theory relevant to risk and sustainability tradeoff. Previous studies proxied risk intelligence by knowledge management, financial literacy, and risk-taking propensity, which paved the way for developing a framework for attaining sustainable SMEs in Nigeria. We concluded that SME’s sustainability could be ensured by effectively managing inherent risks and should be incorporated into Enterprise Risk Management (ERM) systems.

Electricity outages and its effect on small and medium scale enterprises (SMEs) in Nigeria

Constant electricity supply enhances smooth running and performances of SMEs. However, electricity outages in Nigeria have been identified as one of the factors hindering SMEs’ performance. This study aimed at exploring the impact of electricity outages on the operations and contributions of SMEs to Nigeria economy. Hence, the study evaluated the impacts of electricity supply on the growth of SMEs in Nigeria. It analysed the hindrances that deficient electricity supply could have on the growth and development of SMEs. Survey method was employed to administer structured questionnaires to 110 SMEs operators in three local government areas of Mainland, Shomolu and Agege in Lagos state, Nigeria. Descriptive statistics was utilised to analyse the collected data. A chi square method was used to test the formulated hypothesis. Findings revealed that electricity outages have significant effects on SMEs in Nigeria. The study recommends among other things that, state and local governments should join hands with federal government in generating electricity to ensure stable electricity supply; cost-benefit back-up generating plant is also recommended to keep business operative.

Commercial Bank Loans and the Performance of Small and Medium Scale Enterprises (SMEs) In Nigeria

The contributions of Small and Medium Scale Enterprises (SMEs) to the growth of Nigerian economy cannot be understated as they seem to drive the economic and industrial transformation of the country. Notwithstanding the acknowledged role of SMEs, a number of factors tend to limit their growth potentials. They’re still faced with the issue of funding and to overcome this problem, external borrowing has become inevitable. Commercial banks appear to be the most likely source of funds. Thus, the main objective of this study is to ascertain the impact of commercial bank loans on the performance of small and medium scale enterprises in Nigeria. While an ex-post facto research design was adopted in the investigation; a least square regression analysis was carried out on a time-series data to ascertain relationships, and to avert the emergence of spurious results, unit root tests were conducted. Outcome of the study indicates that, there exists an inverse relationship (though not statistically significant) between the amount of commercial bank loans (CBLSME) made available to SMEs and the output of SMEs (OPSME) in Nigeria This implies that as CBLSME increases, OPSME decreases. The negative sign exhibited by OPSME is not in line with our apriori expectation because an increase in CBLSME is supposed to cause an increase in investment which is expected to boost the output of SMEs. This trend has shown the poor attitude of commercial banks towards the granting of loans to SMEs in Nigeria. The study also revealed that a seeming upsurge in the activities of SMEs may not have reduced the rate of unemployment in Nigeria as a good number of people employed by the SMEs are probably under-employed. Conclusively, the inability of our commercial banks to grant effective loans to SMEs have translated to low level of output of SMEs to GDP. This in turn has impacted negatively on average capacity utilization and a consequent hike in the already strained unemployment situation in Nigeria. While commercial banks are expected to come to the rescue of SMEs, the truth must be said, that these institutions are profit oriented and may not be in a vantage position to give long term loans with depositors funds that are predominantly short tenured. Based on the findings of study, it is recommended that, the intervention programs put in place by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to ameliorate the challenges of the SMEs should be strengthened. It is not out of place too, for commercial banks to re-jig their SME desks in order to offer sustainable financial assistance to the SMEs. Lastly, the Bank of Industry (BOI) should be properly positioned in its mandate of providing financial assistance for the establishment of large, medium and small projects as well as the expansion, diversification and modernization of existing enterprises and to rehabilitate the ailing ones.

Impact of Electricity Supply on the Performance of Small and Medium-Scale Enterprises (SMEs) in Nigeria: A Case Study

Despite the fact that past empirical studies have reported that numerous factors affect the performance of SMEs in Nigeria, yet power supply, which is the strategic driver of economic activities and its spillover effects on the performance of SMEs in Nigeria has not been fully investigated in the country. Against this backdrop, this study examined the impact of electricity on the performance of SMEs in Ado-Odo, Ota LGA, Ogun State. Consequently, the questionnaires were administered to the respondents using the method of purposive sampling. The data was analyzed using Statistical Package for Social Science (SPSS), variance analysis (ANOVA) and Correlations and Ordinary Least Squares (OLS) techniques. A total of 120 questionnaires were distributed, of which 90 were compiled and analyzed. The findings showed that there is significant impact of electricity supply on the performance of SMEs in Ado-Odo Ota Area, in Ogun State. Also, alternative power sources have significant impact on performance of SME in Ado-Odo Ota Area, in Ogun State. Therefore, by and large, from the findings of this study, the paper made the following recommendation for the policymakers and business owners in Ado-Odo, Ota Area of Ogun State in particular, and Nigeria by extension that sufficient supply of electricity should be placed in a place that maximizes the efficiency of small and medium-sized businesses. In the same vein, SMEs owners should strive to use alternative sources of power to boost the performance of SMEs, and meet their market objectives.

Improved Public Services and Tax Compliance of Small and Medium Scale Enterprises in Nigeria: A Generalised Ordered Logistic Regression

In this paper, we assess tax compliance among small and medium scale enterprises (SMEs) in Nigeria from the perspective of improving public goods and services. We utilise the Nigerian Economic Summit Group (NESG) 2018 Firms Survey Dataset on taxpayers' perception and attitudes and estimate the model of this research using the Generalised ordered logistic regression analysis. This methodology relaxes the assumption of equal odds as the explanatory variables increase. The results show a positive relationship between improved public goods and services and tax compliance of SMEs in Nigeria. However, the analysis reveals that a small increase in the improvement of public goods has a higher likelihood of moving SMEs to become low tax compliant than being tax compliant. We also find that the public goods with the highest likelihood of improving tax compliance of SMEs in Nigeria are public transport, security, and law courts. Furthermore, the findings reveal a significant positive relationship between Tax compliance of SMEs in Nigeria and tax knowledge, tax penalty, and trust in the government. The paper concludes that policymakers in Nigeria should revisit tax policies geared at improving Tax compliance of SMEs. The steps should include properly combining economic and psychological factors based on the extent to which tax non-compliant SMEs can be moved to become tax compliant.

The Role of Deposit Money Banks’ Loan Facilities in Financing Small and Medium-Scale Enterprises in Nigeria

Abstract The credit money banks whose obligation is to contribute money-wise to small and medium scale enterprises (SMEs) to oblige an essential utensil in decreasing the dismal paucity and enhancing pecuniary change in Nigeria. This paper examines the role deposit money banks’ loan facilities plays in funding SMEs businesses in Nigeria. The study employed the cross-sectional method of survey research. Ten (10) years financial performance index report of SMEs businesses was extracted from the Central Bank of Nigeria (CBN) statistical bulletin between the periods of 2008 – 2017 were selected. The index captured dependent and independent variables. Gross domestic product (GDP) is a proxy to SMEs while fund deposit, loan facilities and return on equity were proxies to deposit money banks variable. Data collected was analysed using descriptive statistics and ordinary least square techniques. The study revealed the positive co-efficient value of 17.19434 and 15.84082 for fund deposit and loan facilities variables; and the negative co-efficient value of −3.442694 for the returns on equity variable which affect the growth of SMEs in Nigeria. The recent economic recession experienced in Nigeria also affect SMEs businesses because the return on equity from SMEs was not encouraging. Therefore, financial regulators should adhere to stability and sustainability of fiscal guidelines that will readdress the loan facilities requirements of 65% to SMEs in the nation’s economy. This will aid enhancement of the country’s economy from the deficiency of funds that impedes investment.

THE ROLE OF THE LAW IN INDUSTRALIZATION: THE CASE OF THE LEGAL FRAMEWORK FOR SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) IN NIGERIA

This paper appraises the legal framework for the regulation of small and medium scale enterprises (SMEs) in Africa with particular reference to Nigeria. The paper examines the legal environment for the operation of SMEs in Africa by appraising the laws enacted for the promotion of SMEs in Nigeria. The paper further examines the laws in order to discover whether they adequately provide for the extant needs of SMEs in Africa in the areas of technology acquisition, access to micro-credit, infrastructure, energy-supply and access to the market for finished products. The paper finds that the laws providing for the needs of SMEs are scanty and still in their embryonic stages. Apart from this, they do not cover most areas of need of the SMEs. Moreover, the enforcement of available laws is still far from satisfactory in Nigeria. There is a need for adequate legal protection for SMEs in Africa in order to stem the growing unemployment and poverty rates across the continent.

Human Capital Development and Exporting Potential of SMES in Nigeria

More and more Small and Medium scale Enterprises (SMEs) in Nigeria are failing before they enter into their second year of operation and those that continue to operate are not seizing the opportunities of taking their businesses to the global market. Though they have the desires and zeal to be enterprising, lack of adequate human capital development through training and skill acquisition continue to be a high priority bottleneck that delimits the exporting potentials of SMEs in Nigeria. This study looked into the level of education of SMEs operators in Nigeria and their performance at the international market. It investigated the correlation and effect of education on the exporting potential of SMEs in Nigeria. Education was discovered to play a vital part in the exporting potential of SMEs as it had a high significant effect on both export (at P value of 0.001) and export sales of SMEs (at P value of 0.000).

The Effect of Business Climate on Operations of Small and Medium Scale Enterprises in Nigeria

This research investigated the effect of business climate on operations of Small and Medium Scale Enterprises (SMEs) in Nigeria. Specifically, the aims were to identify the various business climates affecting SMEs, examine how business climates affects sales turnover of SMEs, and evaluate the effect of business climate on Total Factor Productivity (TFP) of SMEs in Nigeria. The research utilized secondary data collected from 2.783 registered businesses in all sectors. The data collected were analyzed using descriptive statistics such as mean and standard deviation. It reveals that majority of SMEs experience one constraints or another as a major obstacle which includes inadequate electricity supply (53,22%) and access to finance (15,74%). Inferential statistics such as Stochastic Frontier Analysis (SFA) indicated that labour (0,9943; P < 0,05) and infrastructure (0,7133; P < 0,05) are the only significant variables to sales turnover. Meanwhile, the regression analysis shows that raw material, labor, infrastructure and fixed cost are the variables that have a strong predicted variance in TFP at P < 0,05 with p-value of 0,000. Water is also observed to be significant at P < 0,1 with p-value of 0,087.

Inventory Management and SMEs Profitability. A Study of Furniture Manufacturing, Wholesale and Eatery Industry in Delta State, Nigeria

Inventory constitutes bulk of current assets small and medium scale enterprises (SMEs) such as bakeries, fast food/eateries, chain stores and furniture making firms. SMEs need to understand the true costs associated with inventory management and poor inventory productivity so as to be able to review the benefits of alternative approaches. The objective of the study was to examine the effect of inventory management on profitability of SMEs in Nigeria. The study used a descriptive research design. The population consists of all SMEs operating in Delta State. The study used stratified random sampling. 10 SMEs were randomly selected from each stratum making a total of 30 firms for the study. Data for the study were obtained through the administration of a self-designed questionnaire to managers or accountants of the sampled firms. The questionnaire was structured to elicit information about the trading and financial activities for the last two accounting years. A multiple regression analysis was conducted to test the model established for the study. Findings of the study reveal that inventory turnover has a significant positive relationship with financial performance of SMEs. The study also reveals that there is a negative relationship between inventory conversion period and profitability; and no significant positive relationship between inventory leanness and profitability. The study concludes that inventory management has a great role to play in corporate financial performance of firms hence firms’ inventory systems must maintain an appropriate inventory levels to enhance profitability and reduce the inventory costs associated with holding excessive stock in the warehouses. In line with the findings of the study, it is recommended that firms should embrace modern production technology that will enhance faster production to shorten inventory conversion period which will in turn improve inventory turnover and profitability.

Effects of Multiple Taxation on the Performance of Small and Medium Scale Business Enterprises in Benue State

This study is on the effects of multiple taxation on the performance of small and medium scale enterprises (SMEs). Over the years, small and medium scale enterprises (SMEs) have been an avenue of job creation and the empowerment of Nigerian citizens, providing about 50% of all jobs in Nigeria and also for local capital formation. However, the mortality rate of these small firms is very high. Among the factors responsible for these untimely close-ups are tax related issues, ranging from multiple taxation to enormous tax burdens. The study therefore examines the effect of multiple taxation on SMEs survival. The study involves a survey research design with a population of 91. The researchers derived their sample size to arrive at 74 and a selfadministered questionnaire was used to collect data. This data was quantitatively analyzed with simple percentages and the research hypotheses were tested with ANOVA. Findings revealed that multiple taxation has negative effect on SMEs’ survival and the relationship between SMEs’ size and its ability to pay taxes is significant. The research therefore, recommends that government should come up with uniform tax policies that will favour the development of SMEs in Nigeria and government should put into consideration the size of SMEs when formulating tax policies.

A Framework for the Development of a Manufacturing Resources Planning System

Many Small and medium scale enterprises (SMEs), because of the limited scope and size of their operations consider investment in proprietary Enterprise Systems unattractive. Meanwhile In-house development approach has been identified as a way deepening the adoption of these productivity enhancement systems among SMEs in developing economies. This paper presents a framework for developing Manufacturing Resources Planning software adaptable for SMEs in Nigeria and other developing economies. After the critical study and analysis of manufacturing systems, algorithms were developed for generating the material requirement plans for four different lot-sizing techniques. Subsystems for determining Labour and machine capacity requirements and costs, subsystems for material and running costs were integrated into the MRP algorithms. User friendly software of the resulting system was developed using visual basic. The system components were tested using a small-scale process and a middle-scale process to ensure proper functionality. The software which comes with various graphical reporting tools like tables and bar charts was shown to be flexible and accurate, suitable for small and medium enterprises.Keyword: Enterprise Systems, inventory, Material Requirement Planning, Resources planning

Economic implications of constant power outages on SMEs in Nigeria

This paper is concerned with the unabated epileptic power (electric) delivery which is seen to be periodic with a struggling generation capacity and losses-prone inefficient transmission network in Nigeria. Ordinarily, it should mean that only an average Nigerian suffers directly, and only, the burden of this inefficiency, whereby electricity supply to power both household and commercial appliances becomes unpredictable. Yet, further studies have revealed that there is almost no other sector that this ineptitude does not impact indirectly, especially as adverse economic consequences. GDP per Capita versus electrical energy production data for Nigeria and selected countries for the year 2004 served as input parameters which underwent research validation. Small and medium scale enterprises (SMEs) were a case study in this paper. In the end, submissions are that apart from the internal devastating effect on SMEs, constant power outages have a major connection with the recent trends of big companies closing or relocating from Nigeria. To sum up, measures were suggested for improvement.

Can Microfinancing Improve Small and Medium Scale Enterprises in Lagos State, Nigeria

Microfinance is the array of financial services, including loans, savings and insurance, available to poor entrepreneurs and small business owners who have no collateral and would not otherwise qualify for a standard bank loan. Most often, microloans are given to those living in still-developing countries who are working in a variety of different trades, including carpentry, fishing and transportation. However, the paper makes use primary data and questionnaire were distributed to fifty (50) staff of AB microfinance bank, Ikeja branch, Lagos state and fifty (50) selected small and medium scale enterprises in Ikeja metropolis, Lagos State, Nigeria and Spearman's rank correlation coefficient was adopted as the estimation techniques. The paper set to examinethe impact of micro finance bank on small and medium enterprises in Nigeria and to also examine the impact of micro finance policy on employment opportunities in Nigeria. More so, the result shows that Microfinance bank has a significant effect on the growth of small enterprises in Nigeria and Microfinance policy has a significant effect on employment opportunities in Nigeria. Therefore, the paper concludes that the government should focus more on promoting small and medium scale enterprises (SMEs) in Nigeria by giving more microfinance banks opportunity to operate freely and give loan to the SMEs in Nigeria. Finally, the paper recommends that small and medium scale enterprises (SMEs) is seen as the way forward for Nigerian economy rather than relying on oil that has not transformed the economy, so the Nigerian government should embrace SMEs and give more support to the microfinance bank in other to give loan to the SMEs in Lagos State Nigeria.

POST-BANK CONSOLIDATION: A debacle in the survival of SMEs in Nigeria “An Empirical Study”

The contention of this paper is to examine the impact of post-bank consolidation on the performance of Small and Medium Scale enterprises (SMEs) in Nigeria, with special reference to Lagos State. To examine the meritorious advantages of bank consolidation (mergers and acquisitions) in the shareholders wealth creation. To assess the trends, if any, of post-bank consolidation on the economic development of Nigeria and to highlight the ancillary benefits that may have accrued to the economy and SMEs as a result of post bank consolidation. The data procurement was based on survey of Neolithic literatures as well as primary sources, through dissemination of questionnaires based on the concept of the subject matter. A sample size of 50 was drawn from the supra-population of the study within Ikeja Local Government Area in Lagos State, using random sampling techniques. The mean, standard deviation and coefficient of variation were also applied in analysis of data collected. On-line discussions with the respondents was equally adopted which aimed at enlarging the scope of coverage in data collection. The analysis of the study reveals that SMEs in Nigeria, with reference to Lagos State metropolis, do not have better access to finance through banks, due to neo-reorganization in banks as a result of post bank consolidation. It was revealed that SMEs do not have absolute rapport with the financial institutions due to their financial background in Nigeria. They are financially handicapped which limits their size and the capacity to embark on bank loans with high interest rate. The researchers, therefore, are of the opinion that the government should enable the SMEs by providing enabling ground to a better access with financial institutions as regards bank loan at an affordable securities. The paper highlights the supra-environment in which the SMEs operate in Nigeria and their attendant limitations which are assumed do not harness the future survival of the SMEs in the long run.