Government funding and micro and small scale enterprises performance in Kogi state, Nigeria

Abstract

Micro and Small Enterprises (MSEs) play a vital role in employment generation and economic development in Nigeria. However, inadequate access to finance remains a major challenge limiting their growth, sustainability, and overall contribution to the economy. This study examined the impact of government-led funding initiatives on MSEs performance in Kogi State, focusing on interventions by the Bank of Industry (BOI), Bank of Agriculture (BOA), and the Central Bank of Nigeria/Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (CBN/NIRSAL). Employing a survey research design, data were collected from 276 owners and managers of registered MSEs, selected via stratified sampling from a population of 895 enterprises in Kogi State, with the sample size determined using the Taro Yamane formula. Descriptive statistics and multiple regression analysis were used to analyze the data. Results indicate that funding from BOI and CBN/NIRSAL significantly enhances MSEs performance (p < 0.05), while BOA funding shows no statistically significant impact. These findings underscore the pivotal role of targeted government financing in improving MSEs outcomes, provided access barriers and institutional inefficiencies are addressed. The study recommends increased funding allocations to BOI and CBN/NIRSAL to expand financial support for MSEs across Kogi State. It also recommends the restructuring of BOA lending frameworks and improved awareness and outreach programmes to ensure equitable access to financing opportunities for MSEs.