ABSTRACT This research work investigated the effects of micro-financing on Micro and Small Enterprises (MSEs) in South-west Nigeria. The study examined how micro-finance and non-financial micro-financing activities and features such as group membership, pre-loan training, cross guaranteeship, loan size, technical and managerial training, among others, impact on the survival, growth, productivity and performance of Micro and Small Enterprises in Southwest Nigeria. The hypotheses formulated were developed around the theories of financial growth model, pecking order theory, and contract theory. Variables were used to evolve a detailed analysis of the survival and growth models. The theoretical models were used in developing four different hypotheses that were investigated through the survey of four hundred and forty three (443) micro enterprises and one hundred and eighty (180) small enterprises which were randomly selected using multi-stage random sampling technique. Copies of well-structured questionnaire were administered to entrepreneurs sampled. The validity and reliability of the instrument were measured using CronbachΓ’β¬ΕΈs alpha which gave a result of 0.72, while predictive form validity was 0.84. Four hypotheses were raised and tested at 0.05 significant levels. The findings revealed that micro finance and micro-financing enhance survival of Micro and Small Enterprises (MSEs) but not sufficient for growth and expansion of such Micro and Small Enterprises. The result also revealed that microfinance has positive effects on productivity and performance of local entrepreneurs. The findings from the interview sessions revealed that micro financing is not effective and substantially being practiced in Nigeria as many MFBs grant more individual loans than group based loans, thereby increasing their running cost and putting their portfolio at risk. We therefore recommend a collective and cooperative support as a critical microfinance strategy in the form of solidarity groups at the local level; and at the national and regional level, a networking of groups among operators of MFBs. We also recommend that enterprises supported by MFBs should be linked up with larger financing window like the SMEEIS fund or Strategic Partners for expansion and growth funding after survival.
TABLE OF CONTENTS Page (s) Title page - - - . - . (i) Certification - - .. (ii) Declaration - - - (iii) Dedication - - - .(iv) Acknowledgements - - .. - (v) Abstract - - - ..(x) Table of Contents - - - .(xi) List of Tables - - - .(xvi) List of Figures - - - (xix) List of Abbreviations - .. - - (xx)
CHAPTER ONE: INTRODUCTION 1.1 Background to the Study - - - 1 1.2 Statement of the Problems - - - 6 1.3 Research Questions - - - .7 1.4 Objectives of the Study - - - 8 1.5 Statement of Hypotheses - - - .8 1.6 Significance of the study - - - . - ..9 1.7 Scope of the study - - - - 10 1.8 Limitation of the study - - - .10 1.9 Definition of Terms - - - 11
CHAPTER TWO LITERATURE REVIEW 2.1 Introduction - - - - 12 2.2 Review of Conceptual Issues - - ..12 2.2.1 Concepts of Micro, Small and Medium Enterprises and Microfinance - 12 2.2.2 Impact Assessment of Microfinance - - ..20 2.2.3 Methods of Data Analysis Found In Literature - ..25 2.2.4 Measurement of Microfinance Impact - - ..28 2.2.5 Enterprises Survival Prediction and Survival Analysis - .. ..30 2.2.6 Model Generation for Microfinance and MSMEs Survival - ..34 2.3 Theoretical Framework - - ..38 2.3.1 Financial Growth Theory - - - .38 2.3.2 Pecking Order Theory - - - .39 2.3.3 Contract Theory - - - .41 2.4 Entrepreneurship and Growth - - ..41 2.4.1 The Firm and the Entrepreneur - - .41 2.4.2 Firm Life Cycle - - - ..42 2.4.3 Organizational Capabilities - - ..43 2.4.4 Stages of Small Business Development - - .43 2.4.5 Small Business Development - - - 49 2.4.6 Role of Enterpreneur in Business Formation and Growth - 55 2.4.7 SMEs & Growth - - - - .57 2.4.8 MSMEs and Economic Development in Nigeria - - .58 2.4.9 Microcredit and Microenterprise - - ..60 2.4.10 Political & Social dimension to Entrepreneurship in Nigeria - .
