Small And Medium Scale Enterprises Research Articles

Internal control systems of SMEs in Nigeria: a proactive or reactive strategy against employees’ fraud?

Purpose The purpose of this study is to determine the strategy adopted by small- and medium-scale enterprise (SME) owners in setting up internal control systems, examine the relationship between the numbers of employees’ fraud and strategy adopted in setting up internal control and evaluate the difference between proactive and reactive strategies in employee’s fraud prevention among SMEs. Design/methodology/approach A survey research approach was adopted to determine whether proactive or reactive strategies were adopted by the SME owners. Specifically, a survey questionnaire was used to gather primary data from selected respondents in Lagos and Oyo States. Descriptive statistics, Spearman correlation and the Mann–Whitney test were used to analyse the primary data. Findings The study found that most of the SME owners used reactive internal control strategies in setting up their internal control systems after they suffered financial losses occasioned by employees’ fraud. Also, the study found a positive relationship between the number of employees’ fraud and reactive strategy. Finally, the study found a significant difference in the number of employees’ fraud occurrences between proactive and reactive internal control strategies in SMEs. Research limitations/implications The study provides further confirmation that where internal control is properly set up and strengthened, a lower number of employee frauds will occur. Thus, giving credence to the fraud theory. The study was, however, conducted in six selected local government areas in two states. Practical implications The study provides recommendations on the adoption of a proactive strategy for curbing employees’ fraud at the onset of business operations and not until devastating events of employees’ fraud become a reality. Originality/value The study is original, as it focuses on the strategy adopted by SME owners in setting up internal control systems, which is rare in fraud empirical studies, particularly for studies conducted in emerging markets like Nigeria. It provides the need for the sustainability of SMEs as engine of growth and employment through the adoption of appropriate strategies in setting up internal control systems.

Financial Management Practices and Small and Medium-scale Enterprises' Performance in Sri Lanka

Small and Medium-scale Enterprises (SMEs) add value to an economy by creating employment, contributing to Gross Domestic Production (GDP), making innovations, and minimising poverty. They are partnering with the development of the country. Most small and medium-scale enterprises face issues like lack of knowledge, outdated skills, fear of taxation, adoption of accounting standards, and accounting information records. Therefore, this study aims to identify the relationship between financial management practices and SMEs' performance in the southern province of Sri Lanka. This study measures financial management practices using financial reporting analysis, working capital management, fixed asset management, and accounting information systems. SME performance was measured by the profitability of SMEs using return on assets. Considering data constraints, time constraints, and the COVID-19 situation, 107 Small and Medium Enterprises operating in the manufacturing and service sectors were selected as samples. A questionnaire was chosen as the primary data-gathering method. The sample was chosen using a convenience sampling procedure, and the data were analysed using the Statistical Package for Social Scientists (SPSS) software. Multiple regression analysis was done to examine the hypothetical association. This study found that financial management techniques such as fixed asset management, working capital management, accounting information systems, and financial performance of SMEs have a significant association with performance. The findings support aiding investors, workers, and policymakers in making effective decisions.

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

Risk-Taking Ability and Organizational Resilience among Small Scale Business in Lagos State

One major feature of a successful entrepreneur is the ability to take risk in business and not just any risk but calculated risk that will improve the business organization financially. Thes study examined the impact of risk-taking ability on organizational resilience among Small and Medium- sized Enterprises (SMEs) operating in Lagos State, Nigeria. One of the major drivers of economic growth in any nation is the small and medium scale enterprise sector. This study adopts a descriptive research design using a sample size of 500 business owners from various SME sectors a self-structured questionnaire was used as the research instrument. The finding of this study shows that there is a positive correlation between risk taking ability of a business organization and organizational resilience. This implies that risk taking positively influence organizational resilience among small and medium scale enterprises in Lagos state. For business development to take place, a calculated level of risk has to be taken. Risk-taking, Organizational Resilience, Small and Medium Scale Enterprises (SMEs)

Sustainability performance reporting in Ghana: the views of SMEs

ABSTRACT The study examines the perspectives of small and medium-scale enterprises (SMEs) on sustainability performance reporting in Ghana and also determines the impact of the barriers and motivations on SMEs’ decisions to engage in sustainability performance reporting. The study is based on cross-sectional data from 183 SMEs using a structured questionnaire as the research instrument. The study reveals that the extent of sustainability performance reporting of SMEs in Ghana is 38.3%. The results also show that financial constraints, lack of knowledge and awareness, lack of expertise, absence of legal/regulatory requirements and lack of motivation are some of the main barriers perceived as impeding SMEs from engaging in sustainability performance reporting. The study validates the propositions of the resource-based view theory. The findings of the study have important implications for considerations by the key stakeholders in trying to encourage SMEs to adopt or improve sustainability performance reporting behaviour in Ghana.

Effect of logistics management practices on marketing performance of small and medium scale enetrprises in Calabar, Cross River

The study examined the effect of logistics management practices in Calabar. The specific objectives were to investigate the effect of warehouse management, inventory, transportation and order processing on marketing performance of SMSEs in Calabar, Cross River State. The research design used for this study is the survey method. Primary data were collected from small and medium scale enterprises (SMSEs) in Calabar using questionnaire. The data were analysed using inferential and descriptive statistical tools. Based on the results, it was revealed that warehouse management, inventory management, transportation management and order processing have a significant effect on marketing performance of SMSEs in Calabar. On the basis of the findings, it was concluded that logistics and supply chain managers should encourage effective and efficient logistics management practices in their organizations to enhance their marketing performance.

Effects of Business Intelligence, Organisation Learning and Innovation on the Performance of Small and Medium Scale Enterprises (SMEs) in South-West Nigeria

Business Intelligence (BI), both in process and product, is one of the methods used by organizations to develop and access useful information or intelligence that can help enhance their performance. This paper therefore evaluates the effect of business intelligence (BI), organizational learning (OL) and innovation (IN) on the performance of SMEs in the South West Nigeria. Ex-post facto design of descriptive survey was adopted for the study. Primary data were collected on SMEs from Southwest Nigeria. A structured questionnaire (r=0.77) was used to elicit information from selected respondents. The sample size of 400 was adopted as derived from Cochran sample size formula out of the population size of 299,401. The data obtained were analyzed using statistical and econometric techniques. The findings from the analysis through logistic regression showed that only Business Intelligent (organization learning and innovation) has a significant influence on firm performance. The study therefore concluded that firm performance could be boosted by the integration of business intelligence, organizational learning and innovation. Hence, it is suggested that Nigerian small and medium scale businesses that are yet to incorporate business intelligence-driven innovation into any part of their production and delivery processes should make a quick effort to do so.

Inflation and Small and Medium-Scale Enterprises (SMES) Growth in Nigeria

Small Medium Enterprises (SMEs) are important to the economy because they help achieve macroeconomic goals. This has led monetary authorities to adopt policies that foster SMEs’ development and success. This has made the study focus on Inflation and Small and Medium-Scale Enterprises (SMEs) Growth in Nigeria. The objectives of the study are to examine how inflation rates, interest rates and exchange rates have affected SMEs growth in Nigeria, secondary data that spanned from 2001 to 2022 used for the study analysis were sourced from Central Bank of Nigeria (CBN) and the Federal Office of Statistics (FOS). The variables’ stationarity was tested using unit root tests to test the time series data. Cointegration, Ordinary Least Square (OLS) and Error Correction Model (ECM) were used for analysis. Many diagnostic tests were performed on the study residuals. The interest rate positively and statistically significantly affects Nigerian SMEs’ funding. In contrast, inflation has a negative impact on Nigerian SMEs’ funding. The exchange rate had no effect on SMEs funding, according to the research. The study recommended that the monetary authorities should implement policies to reduce inflation and prioritize SMEs growth in Nigeria by establishing dedicated channels via different financial institutions to provide them with low-interest loans. This will boost their growth and help reduce inflation.

A Comparative analysis of service supply chain performance using analytic hierarchy process methodology

The study aims to provide a comprehensive analysis of the service supply chain (SSC) of small and medium scale enterprises (SMEs) and to offer insights to improve its supply chain performance. The study employs mixed methods, to analyse the data collected from SMEs. The findings highlight several key metrics of effective supply chain management in a service firm such as utilisation and flexibility of service capacity, inventory, order lead times, relationships between the organisation, its suppliers and customers, the importance of effective demand forecasting and inventory management as valuable attributes to improve the supply chain performance of service firms. Inventory lead time is presented as a fundamental metric useful in determining the service supply chain performance of SMEs.

Evaluation of Socio-Cultural and Political Factors on Small Scale Business Performance

The research explores the influence of environmental factors on the performance of Small and Medium Scale Enterprises (SMEs) in Oda, Ondo State. Primary data were gathered through the administration of questionnaires to the selected SMEs. Analysis of the data was conducted utilizing Simple Percentage, Chi-Square (X2), and Regression Techniques. The findings of this study clearly show that political and social-cultural factors have significant impact on SMEs performance in Ondo state with the result of hypotheses shown that there were significant positive effect of political and socio-cultural factors through monetary and fiscal policies on the existence of small scale business in Ondo state as the situation was showed through t-statistic and p-value (P= 0.022<0.05) on coefficient value (t=2.098>2.00) and F-stat value 7.617= p(0.034) that showed the robustness of the model with significant differences on the impact of economic factor through government measurement and control from how it was before the inception of this government tenure in Ondo state. The research concludes that environmental factors significantly affect the performance of SMEs in Niger State. In light of these findings, it is recommended that owners and managers of SMEs strategically involve themselves in ongoing monitoring and environmental scanning. This involves a thorough analysis of strengths, weaknesses, opportunities, and threats to consistently assess the overall health and vulnerabilities of their businesses.

Youth Entrepreneurship: A Path to Nigeria's Development

The world is constantly in a state of flux. Contemporary realities such as the Internet revolution with the accompanying Information Age appear to have placed young people above other demographic categories. Increasingly, young people between their teens and early adulthood have been taking very active parts in economic activities and leading critical sectors, especially IT, banking, and small and medium-scale enterprises (SMEs). Their unmatched compliance and savviness in the use of the virtual space have exposed them to limitless knowledge and opportunities that hitherto were difficult to access. The case is not different in Nigeria. Nigerian youths are a formidable population category whose imaginative and creative ability can turn around Nigeria’s dwindling economy if bolstered with an enabling environment. However, the Nigerian State has not been able to leverage the ingenuities and economic capacities of its largest population cluster. This is particularly paradoxical considering Nigeria’s continuous struggle for development. This paradox informs this paper. In it, I foreground the need for the Nigerian State to shift its focus to youth entrepreneurship and encourage bourgeoning youth entrepreneurs to develop innovative economic and/or business activities that can improve the different aspects of Nigeria’s economy and social development. This has become an imperative, especially in light of accidental events like COVID-19. Innovative entrepreneurship, injecting new efforts and ideas, and leveraging youth potential will benefit Nigeria and will not only engender healthy economic performance but also reduce mass unemployment and poverty. Nigeria’s dream of becoming a global economic powerhouse may be built around the entrepreneurship, innovativeness, and creative capacities of her youth population.

Innovation as a Mediator on the Relationship Between Competitor Orientation and SME’s Performance

The perspective of literature concerning the relationship existing between the concept of competitor orientation and performance as it relates to Small and Medium Scale Enterprises (SMEs) is indirect; though supported by limited empiricism, despite the literature's mention of the potential for an indirect association. This has caused a notable knowledge gap in the literature and would be addressed by this study, seeking its significance in mediating the relationship. In order to do this, the study developed two assumptions, in which SMEs in Kaduna state were sampled for the study. Respondents to the data questionnaire are owners and managers of SMEs sampled with proportionate stratified and systematic selection technique. For the final analysis, 424 questionnaires were analysed using the statistical program SmartPls. Competition orientation was identified as a significant and positive predictor of SMEs' performance based on empirical data. Additionally, innovation is important in mediating between firm performance and competitor orientation. Thus; based on the findings of this study; managers and SMEs' owners should make sure that their staff members constantly exchange competition information with one another. Employees that receive competition information are better able to stay informed about developments and trends in the sector, which helps with strategic decision-making.

Leadership of Small and Medium Scale Enterprises (SMEs), Inflation and Economics Development in Nigeria (1981-2021)

One of the important components of economic development which contributes to the growth of the population employment level is the increase in the country’s export potential, development of domestic market of goods and services and small and medium – sized entrepreneurship. It plays special role in the filling of state budget in countries with low and medium level of economic development. The purpose of this paper is to model the relationship between the level of economic development of the country as an indicator of the functioning of small and medium- sized enterprises, assessment of the impact of inflation on the level of economic development. The information base of the research is the data of the World Bank, National Bureau of Statistics of Nigeria, and annual statistical bulletin of the Central Bank of Nigeria. The object of the study is indicators of the functioning of small and medium-sized enterprises and economic development in Nigeria, the period of study is 1981-2021. As dependent variables characterized by the development of a small and medium- sized enterprise, the volume of income per unit of capital was chosen and the GDP was chosen as an indicator of the country’s economic development. Factor variables are characterized by the relationship between the development of small and medium-sized enterprises and the economic development of Nigeria. These include gross capital formation, interest rate, exchange rate and inflation rate. The methodological tools for researching the relationship between the analyzed indicators are the method of estimating the autoregressive distributed lag, the extended Dickey Fuller test and Granger test. According to the results of econometric modeling, the negative impacts of the growth of the exchange rate and the level of inflation on the development of the Nigerian economy has been proven. Thus, a 1% increase in exchange rate would lead to a 0.01% decrease in GDP, while a 0.01% decrease in inflation would be accompanied by an increase in GDP of about 1%. At the same time, gross capital formation exerts a positive and statistically significant influence on the volume of GDP (an increase of 1% will lead to an increase of GDP by approximately 7%). Based on the results of the research, it was concluded that stimulating the growth of investment in small and medium- sized enterprises by simplifying access to credit resources, infrastructure development and capacity building is a prerequisite for long- term socio- economic development of Nigerians.

Effect of Risk Assessment Practices on the Financial Performance of Small and Medium Scale Enterprises (SMES) in Anambra State

The study sought to ascertain the influence of risk assessment procedures on the financial performance of Anambra State's small and medium-sized companies (SMEs). Two research questions were developed, and one hypothesis was evaluated at a 0.05 level of significance. A correlational design was used in the study. The study's population included 2,895 managers of SMEs in Anambra State. A stratified sampling strategy was used to pick the sample. Thirty percent of small and medium-sized entrepreneurs were picked at random from each stratum, yielding an 868-person sample size. Three experts validated the two questionnaires used to gather data. A pilot test was done on 20 managers of SMEs in Enugu State to examine the dependability of the instruments. The Cronbach Alpha reliability technique was used, and the total reliability coefficient for internal consistency was 0.82, suggesting that the study was reliable. The Cronbach Alpha reliability technique was used to assess the data for each instrument cluster, providing values of 0.78 and 0.85 for clusters 1 and 2, respectively. Pearson's Product Moment Correlation and Multiple Regression were used to analyze the data. According to the findings, risk identification and risk analysis have a beneficial impact on the financial performance of SMEs in Anambra State. Furthermore, a substantial association was discovered between risk assessment techniques and the financial success of the state's SMEs. Based on these findings, several recommendations were made, including the suggestion that top management of SMEs should develop a risk assessment framework tailored to their business size, type, and financial capacity.

The Impact of Information Technology on the Management of Small and Medium Scale Enterprise in Nigeria

The objective of this study is to examine the impact of Information Technology to the Management of Small and Medium Scale Enterprises in Nigeria with reference to Ramadan Press Limited, Bauchi, Bauchi State. The research design took both an inferential and a descriptive approach. A sample size of one hundred and thirteen (113) was drawn from the population. A 5 - point Likert scale was developed and validated to collect information from the respondents. The data collected was analyzed with basic descriptive statistics such as frequency and simple percentages. Chi-square analysis was also made. The core findings from the results obtained show that that Information Technology play significant role in the activities and operations of Small and Medium Scale Enterprises (SMEs), that Information Technology has impacted positively on the managerial practice of SMEs and that Information Technology has improved the performance of SMEs. Conclusion was drawn from the summary of the result. Various remarks and recommendations were proffered to the organization of study.

A Review of the Effect of Microfinance Services on the Profitability of SMES in Kenya

Small and medium-scale enterprises (SMEs) are entities of utmost importance in the economic development of a country, as they not only generate job opportunities but also provide goods and services to meet basic human needs. Microfinance institutions (MFIs) are purveyors of financial services such as microcredit, micro savings, and microinsurance, which empower low-income individuals and SMEs to achieve their financial goals. The present study delves into the effects of these microfinance services on the profitability of SMEs in Kenya. The existing empirical literature has shown a significant positive correlation between the utilization of microfinance services and the profitability of SMEs. However, it is imperative to note that gaps exist, including the dearth of localized studies focusing on SMEs in Kenya and the need for more robust methodologies to establish causal relationships. To conclude, SMEs in Kenya can undoubtedly benefit from microfinance services to enhance their profitability. Although existing literature provides valuable insights into this relationship, further research is warranted to address methodological limitations and contextual factors specific to the Kenyan SME landscape.

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.

Resource Management Competencies Required by Business Education Graduates for Engagement in Small and Medium Scale Enterprises in Delta State, Nigeria

The study examined resource management competencies required by Business Education graduates for engagement in small and medium-scale enterprises (SMEs) in Delta State. Two research questions were answered while two null hypotheses were tested at a 0.05 level of significance. The study adopted a descriptive survey research design. The population for the study consisted of 129 subjects comprising 95 final students of Business Education, Delta State University, Abraka, and 34 managers of registered SMEs in Ethiope East LGA of the state. Census sampling techniques were used to sample the entire population of 129 respondents. The instrument for data collection was a structured questionnaire on the resources management competencies of graduates for engagement in SMEs. The instrument was validated by three experts. The Cronbach Alpha reliability method was used to ascertain the reliability of the instrument which yielded a Cronbach alpha coefficient of 0.83 for the entire research instrument. The data for the study were collected with the help of three research assistants. Out of the 129 copies of the questionnaire administered, 116 were retrieved and completely filled representing a 90.0% rate of return. Data collected were analyzed using means for answering the research questions. The null hypotheses were tested using t-test statistics. From the data collected and analyzed, the study identified: 11 financial resource management competencies and 18 human resource management competencies required by Business education graduates for engagement in small and medium-scale enterprises in Ethiope East LGA of Delta State. The results of the hypotheses tested showed no significant (p≤0.05) differences in the mean ratings of Business education students and managers of SMEs on financial resources management competencies whereas, there were significant (p≤0.05) differences in the mean ratings of respondents on human resource management competencies. Based on the findings, the study recommended among others, that the governments of Delta State should help package the identified resource management competencies into teachable programmes for training other University, Polytechnic, and College of Education graduates and retraining existing SME operators for economic success in the state.

Towards developing a knowledge base for small business survival techniques during COVID-19 and sustainable growth strategies for the post-pandemic era

Small and Medium-scale Enterprises (SMEs) often face severe challenges during most global crises. This study utilizes metadata from 694 publications generated through a literature survey on SCOPUS to undertake science mapping, thematic structure analysis, and text analytics to identify, evaluate, and initiate a knowledge base of COVID-19 survival techniques and post-pandemic sustainable growth strategies. The results highlight several streams of strategies. First, the firm’s internal resources and situational leadership abilities, including crisis management techniques and dynamic capabilities, provide the initial resilience against the pandemic challenges, supported by government funding and public policy. Second, adopting digital technologies, modifying business models, and process innovation not only aids survival but enhances internal operations. SMEs can turn challenges into opportunities through product innovation, achieving competitiveness and improved performance. Third, securing funding for SMEs’ digitization or digital transformation can be challenging but offers enormous survival opportunities during crises and sustainable growth in the post-pandemic era. SMEs can explore non-traditional financing options, including crowdsourcing and digital financing. Fourth, readily available virtual technologies (virtual meeting platforms) provide immediate relief to businesses and become a significant part of future business practices in the post-pandemic era. Finally, social entrepreneurship blossomed during COVID-19, ignited particularly by the community lockdown, travel restrictions, self-isolations, and quarantine of entrepreneurs and workers. Although scientists cannot stop the outbreak of pandemics, adequate preparation and understanding of effective strategic responses can cushion negative impacts. Further studies can contribute more survival and sustainable growth strategies against potential crises.

Celebrity endorsement in African context: TEARS model approach

PurposePatronage of local footwear have not been encouraging in Nigeria despite recent investments. The purpose of the study is to evaluate celebrity endorsement and customer patronage of small and medium-scale enterprises (SMEs) products in African context, with focus on trustworthiness, expertise, attractiveness, respect and similarity (TEARS) model.Design/methodology/approachThe research was designed as a descriptive survey. An online structured questionnaire was applied for data collection. Cronbach Alpha and content validity were used for reliability and validity, respectively. TEARS model was used to ascertain key dimensions, and Pearson correlation coefficient and logistic regression were applied into the analysis.FindingsThe findings reveal that celebrity endorsement is not associated with patronage of local footwears, though TEARS model analysis indicates the direction of consumers rating on celebrity endorsement. Factors such as recommendation and quality impact the consumer willingness to buy local footwear.Research limitations/implicationsThe small sample size calls for caution in generalization.Practical implicationsThe study suggests that although the TEARs model is viable, all the dimensions are mutually exclusive. However, this depends on the characteristics of the brand. In driving patronage, managers must pay attention to personal and non-personal cues such as price, quality and source of information about their brand.Originality/valueThe originality is buttressed from the value it provides for local product production and patronage. The significant factors are indicated as key to addressing low patronage.