An appraisal of venture Capital financing on the growth and development of small and medium scale enterprises in Kumbotso Local government area of Kano State

Ummi Ibrahim Atah and Safiyya Abubakar Abba
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Ummi Ibrahim Atah: Department of Economics, Saadatu Rimi College of Education Kumbotso, Kano State, Nigeria
Safiyya Abubakar Abba: Department of Economics, Saadatu Rimi College of Education Kumbotso, Kano State, Nigeria

International Journal of Research and Innovation in Social Science, 2020, vol. 4, issue 11, 171-178

Abstract: This study aims to appraise the role of venture capital (VC) financing on the growth and development of small and medium enterprises (SMEs) in Kano State. The SMEs growth and development in Nigeria is crippled due to lack of financing. The survival of SMEs requires not only financing from bank loans but other alternative sources. The advent of venture capital financing in Nigeria served as sustainable financing mechanisms to resuscitate SMEs’ performance. To achieve the research objectives, the study employs quantitative approach by distributing 50 questionnaires to the existing venture capital firms in Kano State. The simple random sampling technique was used to select 5 venture capitalist organizations in Kano State to participate in the study. The 50 questionnaires collected were analysed using descriptive statistics by using percentages and tabulation. Empirical findings demonstrated a substantial growth and development of SMEs through venture capital financing. The study also revealed that the operation of venture capital is successful, profitable and favoured SMEs in Kano State. Thus, entrepreneurs patronize and prefer venture capital financing than traditional banking loans. Therefore, it is recommended that proper policy framework should be developed to increase the number of venture capital firms in Nigeria. More so, awareness creation and provision of adequate fund are highly recommended.

Date: 2020
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