Effect of COVID-19 on Small- and Medium-Scale Enterprises in Nigeria

Small and medium-sized enterprises (SMEs) are an essential part of Bangladesh's economy, contributing significantly to the country's gross domestic product (GDP). The study aims to investigate the impact of COVID-19 pandemic on the owners of SMEs in Bangladesh. To serve this purpose, cross-sectional data were collected from 103 participants using a purposive sampling technique. We generated different frequency distribution tables based on our inputted data, and then the results of the study were presented using descriptive statistics. The results of the study showed that 58.3% of the SMEs were completely shut down due to COVID-19 pandemic. We also observed that the demand for goods reduced by 83.5%, while production costs increased by 21.4%. Thus, the overall production of goods in SMEs decreased by 48.5%. Most of the owners (90.3%) stated that their profit was dropped by 50% to 100% during corona pandemic, and 68.9% of owners had to retrench workers from their organizations to reduce costs. Approximately, 78.3% of respondents stated that their products remained unsold from 10% to 70% during the pandemic. The findings suggest that policymakers should advance the SME sector by incorporating e-commerce, more favorable government policies, facilitating bank loans, and establishing new training institutions to solve the existing drawbacks of this sector.

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“…Only 1.9 percent of respondents said that they did not lose profits. These results are also consistent with the study of Uzonwanne et al [35].…”

Section: The Reduction Of Profit During Covid-19 Pandemicsupporting

confidence: 94%

Impact of COVID-19 on Small and Medium-sized Enterprises (SMEs) in Bangladesh: An Owner-centric Study

Hossain

Rahman²,

Dey³

et al. 2023

SAJSSE

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“…By and large, Nigerian banks do not provide significant credit to small-business entrepreneurs, especially those without substantial collateral (Uzonwanne 2015). Indeed, Nigerian banks are notorious for lending huge sums to political elites, often with little chance of repayment.…”

Section: The Borehole Water Vending Businessmentioning

confidence: 99%

Water Entrepreneurs, Infrastructural Citizenship, and State Power in Nigeria

Smith

2023

jba

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In today’s world, entrepreneurialism is frequently promoted for its potential to address major global social problems. Entrepreneurs are often celebrated for their ability to achieve what governments and development programs commonly fail to do: deliver sustainable economic and social benefits to poor people in the Global South. Typically, entrepreneurship is seen as bypassing the state. This essay offers a different perspective, showing how, in Nigeria, entrepreneurial enterprises geared to provide access to potable water because the government fails to do so paradoxically serve the interests of those who control the state. Drawing on long-term ethnographic research in southeastern Nigeria, and using examples of private borehole vendors and “pure water” sachet manufacturers, I argue that ordinary people’s infrastructural entrepreneurialism not only requires regular engagement with government officials. It also contributes significantly to the experience of citizenship and the exercise and consolidation of state power.

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“…This data demonstrates that as the Nigerian banking system increasingly become better, banks are reluctant to grant credit to small enterprises. Research suggests that banks unwillingness to grant credit has the potential to stifle innovation, decrease investment, productivity and hamper small enterprises from fulfilling its roles in the economy (Uzonwanne, 2015).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Bank lending behaviour and small enterprise debt financing

Ogunmokun

Mafimisebi

Obembe

2022

JEEE

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Purpose The reason for concern is the rapid decline in loans to small enterprises which is critical to their performance, compared to large businesses following the periods of banking reformations in Nigeria. Thus, the purpose of this paper is to investigate the influence of risk perception on bank lending behaviour to small enterprises. It also investigates the impact of government intervention, consolidation and recapitalization on the relationship between risk perception and bank lending behaviour to small enterprise. Design/methodology/approach This study empirically analysed (ordinary least square) secondary data obtained from the Central Bank of Nigeria Statistical Bulletins, Annual Statement of Accounts covering the period 1992–2020. Findings The results show that the absence of government interventions and the presence of banking reformations have statistically negative significant effect on bank lending to small enterprises. The findings challenge the argument that generally assumes risk aversion of banks towards small enterprise lending because of small enterprise’s inability to prove their credit worthiness and consequently constraining access to finance to the sector. Instead, the results and analysis from this study found theoretical support for the variation of bank behaviour in lending to small enterprises depending on the status of wealth of the financial system. Practical implications A key lesson from this study for government concerned about promoting performance of the small enterprise sector is that regulating and enforcing lending requirements on access to debt financing of the sector is necessary if constraints in access debt finance is to be eliminated. Second, while strategies such as bank consolidation, recapitalization may help strengthen and make financially robust the banking system; it places the banks in a gain position where losses looms to them than gain. Originality/value This study challenges the argument that generally assumes risk aversion of banks towards small enterprise lending as a result of inability to prove their credit worthiness and consequently constraining access to finance to the sector. Instead, the results and analysis from this study reveal a variation in lending to small enterprises and suggests that the position of the bank in relation to a reference point influences how risk is perceived by the bank and thus impacts on their risk decision-making behaviour.

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Effect of COVID-19 on Small- and Medium-Scale Enterprises in Nigeria

Cited by 3 publications

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Impact of COVID-19 on Small and Medium-sized Enterprises (SMEs) in Bangladesh: An Owner-centric Study

Impact of COVID-19 on Small and Medium-sized Enterprises (SMEs) in Bangladesh: An Owner-centric Study

Water Entrepreneurs, Infrastructural Citizenship, and State Power in Nigeria

Bank lending behaviour and small enterprise debt financing

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