Research Article

Strategic effect of sources of fund on the performance analysis of small and medium enterprises in Delta State

Stanley Oghenenyerhovwo Oniovosa

Department of Economics, Delta State College of Physical Education, Mosogar- Sapele, Delta State, Nigeria

Author E-mail: stanleyoniovosa@gmail.com

Accepted 2 December 2013

Abstract

The focus of this research work was on the strategic effect of the sources of fund on the performance analysis of SMEs in Nigeria using the SMEs such as No More BoroBoro Ltd, Kinston Hair Salon, and Fountain Fashion Design in Effurun Delta State as case study. Data were sought through structured questionnaires and analyzed using tables, frequencies, percentages, charts while chi square was used to test the study hypothesis. This thesis tried to review this challenging problem of SMEs financing in Nigeria with a view of identifying alternative financing options besides the traditional banks credit system. The study thus attempt to examine the various sources of fund available to SMEs, the preferred source by the entrepreneur and the difficulties experience in acquiring loans. It was found that many of the SMEs were not aware of the credit scheme available and those aware complained about the high interest rate and short repayment period. It was thus recommended that regulatory and statutory bodies should be made to monitor the interest rate on loans and advances as well as accessibility of Micro Entrepreneurs to finance. Also, Micro Finance policy should be further publicized to create more awareness to attract patronage from members of the low income group who would then have better knowledge of the Finance banks’ offers and how to access their services to enhance their business performances.

Keywords: SMEs, Micro Entrepreneurs, Micro Finance policy