The Attitude of Small and Medium Industrialists to Venture Capital Financing in Nigeria

Isaac Oluwajoba Abereijo and Abimbola Oluwagbenga Fayomi

Global Journal of Business Research, 2007, vol. 1, issue 1, 127-138

Abstract: The principal objective of this paper is to ascertain the extent to which Myers’ Pecking Order Theory (POT) of business financing explains the financial structure of Small and Medium Manufacturing Enterprises (SMEs) in Nigeria. The goal is to examine their attitude with regard to the venture capital financing known as Small and Medium Enterprises Equity Investment Scheme (SMEEIS) introduced by the government in 1999. The data employed were from the database of the survey of manufacturing SME’s in Nigeria. The findings provide evidence suggesting Pecking Order financing behavior is prevalent among manufacturing SMEs in Nigeria. A small proportion of SMEs that consider equity financing for both business start-up and expansion is found. Hence, equity financing through venture capital has not become as popular as other financing alternative in Nigeria. Debt financing appears to dominate their preference, apart from their personal saving and retained earning. Consequently, the paper suggests policy formulation that will address the mindset of the people and encourage greater commitment of banks to actually undertake promotional activities. Among such activities suggested are the identification, development and packaging of viable industries with enterprising customers, and readiness to provide the complementary services to ensure their success.

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.theibfr2.com/RePEc/ibf/gjbres/gjbr-v1n1-2007/GJBR-V1N1-2007-11.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibf:gjbres:v:1:y:2007:i:1:p:127-138

Access Statistics for this article

Global Journal of Business Research is currently edited by Terrance Jalbert

More articles in Global Journal of Business Research from The Institute for Business and Finance Research
Bibliographic data for series maintained by Mercedes Jalbert ( this e-mail address is bad, please contact ).