Effect of Financing Options on Performance of Small and Medium Enterprises in Federal Capital Territory Abuja, Nigeria
Year: 2024
Type: article
Abstract: Small and Medium Enterprises play a vital role in Nigeria's economic growth. However, in the Federal Capital Territory Abuja, the performance of some of the small and medium enterprises and hindered by a severe financing gap, limiting expansion, technological adoption, and productivity improvement. Therefore, this study examined the effect of financing options on performance of small and medium enterprises in Federal Capital Territory Abuja Nigeria. This study adopted a survey research design, with population of 22,861 registered small and medium enterprises and sample size of 432 which was purposively selected. The study used questionnaire as instrument for data collection and Multiple regression analysis was employed to analyze the data collected. The study found that both bank loan and venture capital financing have positive but insignificant effect on performance of small and medium enterprises in Federal Capital Territory Abuja, Nigeria at 5% level of significant. The study conclude that financing options of bank loan and venture capital influence the performance of small and medium enterprises. The study thus recommended that SMEs operators in FCT Abuja, Nigeria, are advised to position their businesses to attract venture capitalists by improving their business models, enhancing their market competitiveness, and demonstrating scalability and innovation. This can be achieved through engaging in capacity-building programs on venture capital financing, as this will help them better understand investor expectations, negotiate favorable equity terms, and secure strategic partnerships.
Authors: KOLO, IBRAHIM, AMTAI, MOHAMMED ALI
Institution: Nasarawa State University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4406290411