STRUCTURE AND CONSTRAINTS OF MICRO, SMALL AND MEDIUM SCALE ENTERPRISES (MSMEs) IN NIGERIA
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In both developed and developing economies, there are evidences of the immense
contributions of MSMEs to economic growth and development. Small enterprises are known
to adapt with greater ease under difficult and changing circumstances because they are
typically low in capital intensity and allow product lines and inputs to be changed at
relatively low cost. With the collapse of the world oil market and the ensuing economic
downturn in Nigeria, refocusing attention on the MSMEs will help reduce unemployment,
create wealth and alleviate poverty. Hence, this paper set out to profile the structure of
MSMEs in Nigeria, examine their firm characteristics, financing and operations and
constraints with a view to proffering suggestions on how to use MSMEs as a strategy for
economic development in Nigeria in the face of the current economic downturn. Results of
the survey conducted indicated that MSMEs dominate Nigeria’s economic landscape as 53.5
per cent of the respondents were in the micro-enterprise category, 29.6 per cent in the smallscale
category, 14.1 per cent in the medium-enterprise category and only 2.8 per cent in the
large scale category. Capacity utilization rate was highest for MSMEs in the
agriculture/agro-processing sector at 70.2 per-cent compared with 55.4 per cent for those in
the manufacturing sector. Inadequate fund/working capital was the most mentioned problem
by the MSMEs. It was therefore, recommended that credit programmes that will take
cognisance of the peculiarities of MSMEs in Nigeria be intensified so as to increase their
access to funds in view of their dominance and potential contribution to the growth of the
economy
Keywords
H Social Sciences (General), HG Finance