Finance Options for Small and Medium Scale Enterprises in Nigeria: an Empirical Analysis

Abstract

This paper examines the role of finance for small and medium scale enterprises in Nigeria and the finance options available. The study covers 1992 to 2010 and observes that most enterprises are dependent on informal sources which have very low impact on their growth. Finance from banks has the largest impact but fraught with issues as lenders are unwilling due to information asymmetry and moral hazards The capital market source follows the banking source, but equally not readily available. This results in truncation of many proposals or their untimely exit. If enterprises are to really develop, the banking and capital market source should be given adequate motivation and support. The current scenario is inadequate for the expected output.