FINANCIAL CHALLENGES OF SMEs IN OREDO LOCAL GOVERNMENT AREA OF EDO STATE

ABSTRACT

This study examined Financial Challenges faced by Small Scale Enterprises in Oredo local Government Area of Edo State. Four (4) research questions were raised and literature of other researchers were reviewed. The study adopted the descriptive survey research design, data was collected through the aid of a questionnaire. The questionnaire was structured according to the research questions and distributed to sample population of 100 respondents. The findings of the study revealed that there are several financial problems encountered by Small Scale Enterprises such as high interest rates on loans, difficulty in accessing government grants and support programs, access to credit facilities, limited working capital and so on. The nature of credit financing facilities offered to small and medium scale enterprises comes in form of grants, support for financial literacy and capacity building, loan tenure and repayment terms, availability of government-backed loans and grants, interest rates on credit facilities and accessibility of credit facilities. Availability of credit has significant influence on small and medium scale business survival as credit helps in expanding business operations and boost business resilience during economic downturns. Governments has a significant roles towards the survival of SMEs such as infrastructure and technology support, government policies and regulations, government initiatives to promote SME growth, business training and development programs and access to credit and financial assistance. It was however recommended that to enhance access to capital for SSEs, governments and financial institutions should expand and promote microfinance and credit facilities tailored to the needs of these enterprises; and that SME owners and entrepreneurs often lack the financial management skills needed to sustain and grow their businesses.