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This study on the challenges in financing small and medium scale enterprises was undertaken to achieve a number of objectives including identifying major challenges created by institutions to the success of small and medium scale enterprises. To achieve these set objectives, research questionnaires and research hypothesis were formulated to guide the research effort. Based on the data analysis, the researcher established that there is a relationship between institutional challenges and the growth of small and medium scale enterprises; that government incentives have significant effect on the growth of SMEs. Finally, the study recommends that further study should be undertaken on how each of the institutions contributes relative to the performance of the enterprises so, the incentives of governments to SMEs should be made accessible to reduce the impediments and enhance SMEs performance.
