THE IMPACT OF VENTURE FINANCING ON SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA
ABSTRACT
The study looked at the Impact of Venture Capital Financing on SMEs in the Uyo Local Government area. Efforts by successive Government to improve on the performance and growth of SMEs had led to the enactment of different
policies and act including the Venture Capital Fund to assist SMEs. SMEs still in Nigeria have been faced with liquidity and financing challenges leading to challenges leading to production Industrial disputes and sometimes closures by regulatory
authorities.
In order to achieve the objectives for the study, 50 questionnaires were administered to Manager/SME owners
operating within the Uyo Local Government area with focus on Elsa Foods Ltd using convenience sampling
techniques. It was generally observed that
SME‟s prefer-financing and self occasionally received support from financial institutions. The findings further shows
that SMEs continue to rely on many financing options both at their conceptual and expansion stage. Majority of the
SMEs were however not aware or had little knowledge about Venture Capital Financing as an alternative to financing.
Firms that had benefited from Venture Capital Financing stated that they did not only receive capital inflow but was
accompanied with monitoring, technical skills and expertise, access to management, marketing and distribution and
reputation for attracting further finance. The study recommends that SMEs need to recognize the potential
advantages of seeking equity finance from venture capital. Venture capital fund managers can do much to encourage venture capital investment from corporate investors. Government and policy makers should play a dual role as both facilitators and educators in encouraging the venture capital process.Following from the conclusions and recommendation a more detailed research involving SMEs from different industries and states is highly recommended.
THE IMPACT OF VENTURE FINANCING ON SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA