Role of Informal Financing in Promoting SMEs in Nigeria

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dc.contributor.authorSheriff Akanji Ibrahim
dc.contributor.authorLukman Adebayo-Oke Abdulrauf
dc.contributor.authorYusuf Olamilekan Quadri
dc.contributor.authorAina Taye John
dc.date.accessioned2025-07-16T09:12:30Z
dc.date.available2025-07-16T09:12:30Z
dc.date.issued2025-03-30
dc.description.abstractSmall and medium enterprises (SMEs) are critical to Nigeria’s economic development, contributing to employment generation, innovation and poverty alleviation. However, access to finance remains a major constraint for SMEs, limiting their ability to grow and sustain operations. The study examines the role of informal financing in promoting SME growth in Ilorin Metropolis, Kwara State, Nigeria, focusing on the extent to which SMEs rely on informal financial sources and the impact of such financing on business performance. The study employs a quantitative research approach, using survey questionnaires to collect data from SME owners and managers. A multiple linear regression model was employed. The results established that informal financing positively impacts SME growth, with personal savings having the strongest influence, followed by family and friends and cooperative societies. Based on these findings, the study recommends policy interventions to improve SME access to financing, including reforming microfinance loan structures, strengthening cooperative societies, implementing financial literacy programs, and introducing government-backed credit facilities tailored to SME needs. Additionally, integrating informal financing models into the formal financial system could bridge the gap between SMEs and structured financial products, enhancing business sustainability.
dc.identifier.issn0972-9259
dc.identifier.urihttps://kwasuspace.kwasu.edu.ng/handle/123456789/5687
dc.language.isoen
dc.publisherThe IUP Journal of Business Strategy
dc.titleRole of Informal Financing in Promoting SMEs in Nigeria
dc.typeArticle
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