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Preferences of micro, small and medium scale enterprises to financial products in Nigeria

Evbuomwan, Grace O. and Ikpi, A.E. and Okoruwa, V.O. and Akinyosoye, V.O. (2012) Preferences of micro, small and medium scale enterprises to financial products in Nigeria. Journal of Agricultural Economics and Development, 14. pp. 80-98.

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Abstract

Micro, small and medium enterprises (MSMEs) are companies whose headcount or turnover falls below certain limits. The definitions change over time and depend, to a large extent, on a country’s level of development. In both developed and developing economies, there are evidences of the immense contributions of MSMEs to economic growth and development. It has been recognized that among the constraints to effective development of MSMEs in Nigeria is the limited access of the investors to long term credit. Consequently, various funding initiatives have been instituted. However, the MSMEs are still complaining of inadequate funds. Hence, this paper set out to determine the preferences of MSMEs to financial products in Nigeria so as to adequately target them. Survey results indicated that 75.7% of the respondents relied mostly on own funds to finance their businesses, the frequency analysis indicated that inadequate fund/working capital was the most mentioned problem with a percentage share of 60.7% followed by the problem of poor power supply/inadequate infrastructure which took 55.7%. It was therefore, not surprising that 86.1% of the respondents would want the Small and Medium Enterprises Equity investment Scheme to continue. However, 64.7% would prefer loan so they can be in full control of their businesses, while only 15.7% preferred equity. It was recommended that credit programmes that will take cognisance of the peculiarities of MSMEs in Nigeria be intensified so as to increase their access to funds in view of their dominance and potential contribution to the economy.

Item Type: Article
Uncontrolled Keywords: Micro, small and medium enterprises, financial products, credit, equity
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Hannah Akinwumi
Date Deposited: 08 Feb 2018 07:45
Last Modified: 08 Feb 2018 07:45
URI: http://eprints.covenantuniversity.edu.ng/id/eprint/10183

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