Citation:

Dada, O. S., Prof. Owualah, S.I. "Entrepreneurial Financing and Financial Performance of Selected Small and Medium Enterprises in Lagos State, Nigeria" International Research Journal of Economics and Management Studies, Vol. 2, No. 2, pp. 472-479, 2023.

Abstract:

It is impossible to exaggerate the importance of small and medium enterprises (SMEs) to the national economy. In recent years, especially in developing nations, these businesses have drawn more attention from policymakers. This is largely because large-scale, capital-intensive, and import-dependent industrial enterprises are the focus of development schemes. In contrast, the SME sector has registered a higher growth rate than the global industrial sector in recent years. However, financing has been a major challenge for SMEs, as they often face difficulties in obtaining financing from traditional financial institutions due to their size, lack of collateral, and high-risk profile. As a result, this study looked at how entrepreneurial funding affected the financial success of small and medium-sized businesses in Lagos State, Nigeria. The research design for the study was survey-based. Using the Krejcie and Morgan sample size table, the study selected a sample of 370 registered small and medium-sized businesses operating in Lagos State, Nigeria. A genuine and trustworthy survey with a Cronbach alpha value over 0.7 was used to collect the data. For the data analysis, both descriptive and inferential approaches were employed. The factors' effects were determined using the Statistical Package for Social Science (SPSS) multiple regression analysis. The study revealed that entrepreneurial financing has positive and significant effect on financial performance of selected small and medium enterprises in Lagos State, Nigeria (R = 0.692, AdjR2 = 0.475, df = (3, 414) = 126.794, at p = 0.000 (p <0.05). The study came to the conclusion that the financial performance of particular small and medium-sized businesses in Lagos State, Nigeria, is positively and significantly impacted by entrepreneurial funding. According to the study, management of these businesses should aggressively look for and investigate other sources of entrepreneurial finance, including venture capital, angel investors, and crowdfunding platforms, to support their operations and boost financial performance.

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Keywords:

Asset financing, Entrepreneurial financing, Financial performance, Loan facility, Trade credit.