Impacts of Microfinancing on the Survival and growth of the Small Scale Enterprises in South Western, Nigeria
By: ALABI FEMI ADEOYE
College of Social and Management Sciences, Bowen University, Iwo, OsunState, Nigeria
SMEs can be seen as a strategic tool for empowerment, employment and income generation that enhance economic growth but yet their survival and development after maximum of five years cannot be guaranteed. This is a huge puzzle that needs to be resolved with the dominant challenges of SMEs been attributed to finance and funding. It is obvious that most SMEs in Nigeria because of size and structure, cannot meet the conventional banks requirement and conditions for loans but must look elsewhere for financial services (SMEDAN, 2010). The microfinance banks are well positioned on their mandate to support, assist SMEs for both financial and non-financial services.
The empirical studies that exist on SMEs in developing countries are few and are mostly focused on economic growth and problems associated to their operation (Hossain, 1988; Carpenter, 2001; Sanusi, 2003; Onugu, 2005; Ughulu, 2007; SMEDAN ,2010; Akingunola, 2011; Adetula, et al.2014; Etuk et.al, 2014). There is a scarcity of empirical studies on the SMEs, business survival and growth in developing countries, especially in Nigeria.
The focal point of this study is to examining how microfinance banks financing has influenced the survival and growth of small and medium scale enterprises in South Western, Nigeria, over time due to the fact that the most available source of funds to SMEs is through micro finance. Another focal point is to examine the capability of Microfinance institutions in enhancing the expansion capacity of small businesses in Nigeria. The study also would contribute to the literature on microfinance and small business survival. It was observed that different successive governments in Nigeria have always had a policy programme for SMEs, but most of the programmes have failed to achieve sustainable growth in the SMEs sub-sector. Most of the government assisted-programmes have themselves become failures. Therefore, the findings of this study is expected to inform policy makers regarding the direction of further research into interventionist programmes for SMEs in South Western Zone that can be generalized for Nigeria.