Thesis Abstract

This study assesses the financing option available to Small and Medium Scale Enterprises (SMEs) in Nigeria, using a total sample of 84 SMEs drawn from Benue and Nasarawa States as case study for a study period of 2007-2009. Mean scores and standard deviation were used to present and analyze the primary data obtained via questionnaires. Correlation was used to substantiate whether there is similarity in the inherent identified problems of each financing option. Simple percentages combined with mean scores were used to test hypothesis one while Chi-square was used to test hypothesis two. The result/findings show that SMEs are significantly financed by informal sources of finance than the formal sources of finance. Even SMEEIS, as a seemingly more organized formal financing option, has not made any significant impact towards SMEs growth in Nigeria. Corporate governance has been identified to be lacking in our predominant SMEs which is why their funding problem still subsists. The major recommendation is that Capacity building and sensitization programmes for all registered SMEs should be put in place by government to train them on the basics of corporate governance mechanisms needed to grow the enterprises to the highest level possible for the benefit of the Nigerian economy as a whole. Both the government and the banking sector should mutually agree on a credit guaranteed scheme strategy that will incorporate a risk-sharing arrangement as a way of encouraging the banks to channel funds to the SMEs sub sector for their growth and development which would translate into the national economic growth and sustainable economic development of Nigeria.

Thesis Overview