Barriers to Accessing Financial Institutions Funding for Nigerian SMEs

Babandi Ibrahim Gumel; Barjoyal Bin Bardai

doi:doi:10.11648/j.ijber.20211006.12

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Barriers to Accessing Financial Institutions Funding for Nigerian SMEs

Babandi Ibrahim Gumel, Barjoyal Bin Bardai

Published in International Journal of Business and Economics Research (Volume 10, Issue 6)

Received: 26 October 2021 Accepted: 11 November 2021 Published: 19 November 2021

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Abstract

Small businesses are recognized worldwide as a catalyst of socio-economic development. Like all developed and developing countries, due to the economic importance of SMEs, the federal government of Nigeria is developing policies and strategies to diversify its economy from total dependence on oil. Part of the economic development diversification effort by the federal government of Nigeria is to develop entrepreneurship and small businesses. The most crucial aspect of SMEs in Nigeria is their contribution to employing most citizens. Despite the importance of socio-economic development, most SMEs fail within the first five years. Many challenges are facing SMEs in Nigeria, which resulted in their failure. Although financial resources have been a critical success factor to SMEs, they find it difficult to access financial institutions funding to finance innovation and business opportunities to ignite success and growth. Many studies had identified numerous barriers to access to financial institutions funding, but they apply to locations of the findings. The objective of this paper was to identify the barriers that are preventing small businesses from accessing financial institutions funding in Nigeria. In this study, 296 small business owners/managers participated in a quantitative self-administered survey, and 15 owners/managers with adequate knowledge of small business managers participated in a semi-structured interview. The mixed research method revealed four barriers to accessing financial institutions funding to Nigerian SMEs: inadequate access to financial institutions; inadequate education, skills, and experience of owners/managers; exorbitant interest rates; and gender discrimination. The study made seven recommendations for removing the barriers which might spur financial institutions' funding of SMEs in Nigeria. Improving access to financial institutions funding will increase success and growth, reducing unemployment and igniting socio-economic development as envisaged by the federal government of Nigeria. The study concluded that most of the recommendations would be implemented by government and regulators through appropriate policies and strategies that will increase the access of small business financial institutions funding.

Published in	International Journal of Business and Economics Research (Volume 10, Issue 6)
DOI	10.11648/j.ijber.20211006.12
Page(s)	219-226
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Entrepreneurship, Financial Institutions Funding, Socio-economic Development, SMEs

References

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APA Style

Babandi Ibrahim Gumel, Barjoyal Bin Bardai. (2021). Barriers to Accessing Financial Institutions Funding for Nigerian SMEs. International Journal of Business and Economics Research, 10(6), 219-226. https://doi.org/10.11648/j.ijber.20211006.12

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ACS Style

Babandi Ibrahim Gumel; Barjoyal Bin Bardai. Barriers to Accessing Financial Institutions Funding for Nigerian SMEs. Int. J. Bus. Econ. Res. 2021, 10(6), 219-226. doi: 10.11648/j.ijber.20211006.12

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AMA Style

Babandi Ibrahim Gumel, Barjoyal Bin Bardai. Barriers to Accessing Financial Institutions Funding for Nigerian SMEs. Int J Bus Econ Res. 2021;10(6):219-226. doi: 10.11648/j.ijber.20211006.12

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@article{10.11648/j.ijber.20211006.12,
  author = {Babandi Ibrahim Gumel and Barjoyal Bin Bardai},
  title = {Barriers to Accessing Financial Institutions Funding for Nigerian SMEs},
  journal = {International Journal of Business and Economics Research},
  volume = {10},
  number = {6},
  pages = {219-226},
  doi = {10.11648/j.ijber.20211006.12},
  url = {https://doi.org/10.11648/j.ijber.20211006.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20211006.12},
  abstract = {Small businesses are recognized worldwide as a catalyst of socio-economic development. Like all developed and developing countries, due to the economic importance of SMEs, the federal government of Nigeria is developing policies and strategies to diversify its economy from total dependence on oil. Part of the economic development diversification effort by the federal government of Nigeria is to develop entrepreneurship and small businesses. The most crucial aspect of SMEs in Nigeria is their contribution to employing most citizens. Despite the importance of socio-economic development, most SMEs fail within the first five years. Many challenges are facing SMEs in Nigeria, which resulted in their failure. Although financial resources have been a critical success factor to SMEs, they find it difficult to access financial institutions funding to finance innovation and business opportunities to ignite success and growth. Many studies had identified numerous barriers to access to financial institutions funding, but they apply to locations of the findings. The objective of this paper was to identify the barriers that are preventing small businesses from accessing financial institutions funding in Nigeria. In this study, 296 small business owners/managers participated in a quantitative self-administered survey, and 15 owners/managers with adequate knowledge of small business managers participated in a semi-structured interview. The mixed research method revealed four barriers to accessing financial institutions funding to Nigerian SMEs: inadequate access to financial institutions; inadequate education, skills, and experience of owners/managers; exorbitant interest rates; and gender discrimination. The study made seven recommendations for removing the barriers which might spur financial institutions' funding of SMEs in Nigeria. Improving access to financial institutions funding will increase success and growth, reducing unemployment and igniting socio-economic development as envisaged by the federal government of Nigeria. The study concluded that most of the recommendations would be implemented by government and regulators through appropriate policies and strategies that will increase the access of small business financial institutions funding.},
 year = {2021}
}

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TY  - JOUR
T1  - Barriers to Accessing Financial Institutions Funding for Nigerian SMEs
AU  - Babandi Ibrahim Gumel
AU  - Barjoyal Bin Bardai
Y1  - 2021/11/19
PY  - 2021
N1  - https://doi.org/10.11648/j.ijber.20211006.12
DO  - 10.11648/j.ijber.20211006.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 219
EP  - 226
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20211006.12
AB  - Small businesses are recognized worldwide as a catalyst of socio-economic development. Like all developed and developing countries, due to the economic importance of SMEs, the federal government of Nigeria is developing policies and strategies to diversify its economy from total dependence on oil. Part of the economic development diversification effort by the federal government of Nigeria is to develop entrepreneurship and small businesses. The most crucial aspect of SMEs in Nigeria is their contribution to employing most citizens. Despite the importance of socio-economic development, most SMEs fail within the first five years. Many challenges are facing SMEs in Nigeria, which resulted in their failure. Although financial resources have been a critical success factor to SMEs, they find it difficult to access financial institutions funding to finance innovation and business opportunities to ignite success and growth. Many studies had identified numerous barriers to access to financial institutions funding, but they apply to locations of the findings. The objective of this paper was to identify the barriers that are preventing small businesses from accessing financial institutions funding in Nigeria. In this study, 296 small business owners/managers participated in a quantitative self-administered survey, and 15 owners/managers with adequate knowledge of small business managers participated in a semi-structured interview. The mixed research method revealed four barriers to accessing financial institutions funding to Nigerian SMEs: inadequate access to financial institutions; inadequate education, skills, and experience of owners/managers; exorbitant interest rates; and gender discrimination. The study made seven recommendations for removing the barriers which might spur financial institutions' funding of SMEs in Nigeria. Improving access to financial institutions funding will increase success and growth, reducing unemployment and igniting socio-economic development as envisaged by the federal government of Nigeria. The study concluded that most of the recommendations would be implemented by government and regulators through appropriate policies and strategies that will increase the access of small business financial institutions funding.
VL  - 10
IS  - 6
ER  -

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Author Information

Babandi Ibrahim Gumel

Department of Finance, Faculty of Business Administration, LIGS University, Honolulu, USA
Barjoyal Bin Bardai

Department of Finance, Faculty of Business Administration, LIGS University, Honolulu, USA

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APA Style

Babandi Ibrahim Gumel, Barjoyal Bin Bardai. (2021). Barriers to Accessing Financial Institutions Funding for Nigerian SMEs. International Journal of Business and Economics Research, 10(6), 219-226. https://doi.org/10.11648/j.ijber.20211006.12

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ACS Style

Babandi Ibrahim Gumel; Barjoyal Bin Bardai. Barriers to Accessing Financial Institutions Funding for Nigerian SMEs. Int. J. Bus. Econ. Res. 2021, 10(6), 219-226. doi: 10.11648/j.ijber.20211006.12

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AMA Style

Babandi Ibrahim Gumel, Barjoyal Bin Bardai. Barriers to Accessing Financial Institutions Funding for Nigerian SMEs. Int J Bus Econ Res. 2021;10(6):219-226. doi: 10.11648/j.ijber.20211006.12

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@article{10.11648/j.ijber.20211006.12,
  author = {Babandi Ibrahim Gumel and Barjoyal Bin Bardai},
  title = {Barriers to Accessing Financial Institutions Funding for Nigerian SMEs},
  journal = {International Journal of Business and Economics Research},
  volume = {10},
  number = {6},
  pages = {219-226},
  doi = {10.11648/j.ijber.20211006.12},
  url = {https://doi.org/10.11648/j.ijber.20211006.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20211006.12},
  abstract = {Small businesses are recognized worldwide as a catalyst of socio-economic development. Like all developed and developing countries, due to the economic importance of SMEs, the federal government of Nigeria is developing policies and strategies to diversify its economy from total dependence on oil. Part of the economic development diversification effort by the federal government of Nigeria is to develop entrepreneurship and small businesses. The most crucial aspect of SMEs in Nigeria is their contribution to employing most citizens. Despite the importance of socio-economic development, most SMEs fail within the first five years. Many challenges are facing SMEs in Nigeria, which resulted in their failure. Although financial resources have been a critical success factor to SMEs, they find it difficult to access financial institutions funding to finance innovation and business opportunities to ignite success and growth. Many studies had identified numerous barriers to access to financial institutions funding, but they apply to locations of the findings. The objective of this paper was to identify the barriers that are preventing small businesses from accessing financial institutions funding in Nigeria. In this study, 296 small business owners/managers participated in a quantitative self-administered survey, and 15 owners/managers with adequate knowledge of small business managers participated in a semi-structured interview. The mixed research method revealed four barriers to accessing financial institutions funding to Nigerian SMEs: inadequate access to financial institutions; inadequate education, skills, and experience of owners/managers; exorbitant interest rates; and gender discrimination. The study made seven recommendations for removing the barriers which might spur financial institutions' funding of SMEs in Nigeria. Improving access to financial institutions funding will increase success and growth, reducing unemployment and igniting socio-economic development as envisaged by the federal government of Nigeria. The study concluded that most of the recommendations would be implemented by government and regulators through appropriate policies and strategies that will increase the access of small business financial institutions funding.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Barriers to Accessing Financial Institutions Funding for Nigerian SMEs
AU  - Babandi Ibrahim Gumel
AU  - Barjoyal Bin Bardai
Y1  - 2021/11/19
PY  - 2021
N1  - https://doi.org/10.11648/j.ijber.20211006.12
DO  - 10.11648/j.ijber.20211006.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 219
EP  - 226
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20211006.12
AB  - Small businesses are recognized worldwide as a catalyst of socio-economic development. Like all developed and developing countries, due to the economic importance of SMEs, the federal government of Nigeria is developing policies and strategies to diversify its economy from total dependence on oil. Part of the economic development diversification effort by the federal government of Nigeria is to develop entrepreneurship and small businesses. The most crucial aspect of SMEs in Nigeria is their contribution to employing most citizens. Despite the importance of socio-economic development, most SMEs fail within the first five years. Many challenges are facing SMEs in Nigeria, which resulted in their failure. Although financial resources have been a critical success factor to SMEs, they find it difficult to access financial institutions funding to finance innovation and business opportunities to ignite success and growth. Many studies had identified numerous barriers to access to financial institutions funding, but they apply to locations of the findings. The objective of this paper was to identify the barriers that are preventing small businesses from accessing financial institutions funding in Nigeria. In this study, 296 small business owners/managers participated in a quantitative self-administered survey, and 15 owners/managers with adequate knowledge of small business managers participated in a semi-structured interview. The mixed research method revealed four barriers to accessing financial institutions funding to Nigerian SMEs: inadequate access to financial institutions; inadequate education, skills, and experience of owners/managers; exorbitant interest rates; and gender discrimination. The study made seven recommendations for removing the barriers which might spur financial institutions' funding of SMEs in Nigeria. Improving access to financial institutions funding will increase success and growth, reducing unemployment and igniting socio-economic development as envisaged by the federal government of Nigeria. The study concluded that most of the recommendations would be implemented by government and regulators through appropriate policies and strategies that will increase the access of small business financial institutions funding.
VL  - 10
IS  - 6
ER  -

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