Financing the Small and Medium Enterprises in Post COVID- 19 Nigerian Economies: Issues and Perspectives

Abstract

The purpose of this paper is to explore the financing needs of Small and Medium Enterprises in the Post COVID-19 Nigeria Economy. The present state of the Economy was reviewed to determine how the pandemic has affected both the economy and the SMEs.Also a study to determine financing gaps of the SMEs in Nigeria using the simple descriptive means and standard deviations was carried out. The study is based on a sample of 150 small business owners across different sectors (Trade, Services, ICT, Education, and Hospitability) in Port Harcourt Rivers State. The results show that SMEs have financing gaps that are demand related. Consistent with previous studies, the results show that risk aversion, desire to maintain control and reputational effects are key factors explaining the demand-side financing gaps of SMEs in Nigeria. An outlook of the post COVID-19 era projects a weak economy that would struggle to recover. This paper concludes that SMEs that are already faced with demand related financing gaps and aggravated by low sales and supply chain shocks caused by the pandemic should be more strategic in pursuing their financing needs in the wake of post COVID-19 dwindling economy. To strengthen and enhance the capabilities of SMEs, recommendations are made to both the SMEs and the Monetary Authorities.