Access to Micro Enterprise Financing in Nigeria

Access to Micro Enterprise Financing in Nigeria

Atsede Woldie (University of Glamorgan, UK), John C. Nzekwu (University of Glamorgan, UK) and Brychan C. Thomas (University of Glamorgan, UK)
DOI: 10.4018/978-1-4666-2952-3.ch017


This study outlines a preliminary survey into access to finance, as experienced by micro enterprises (MEs) in Nigeria. It also aims to gain insight into the financing behaviour of ME enterprise owner/managers in Nigeria and factors that constrain access and create a lack of co-operation between firms and banks.
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2. Literature Review

The literature suggests that MEs are not able to access the same kind of finance often available to large businesses. For instance, research carried out by Carpenter and Petersen (2002) in the US, examined more than 1,600 micro and small manufacturing firms and found that growth of these firms appeared to be constrained by lack of (internal) finance. The literature also clearly suggests a strong link between the availability of finance and enterprise growth, leading to the notion of a ‘finance gap’ which implies that “there may be major ‘barriers’ preventing an owner-manager’s access to equity” (Hutchinson, 1995, p.231).

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