Fostering Entrepreneurial Finance and Entrepreneurship Development: The Moderating Role of Institutional Finance Agencies in Nigeria

Abstract

This research examines the nexus between entrepreneurial finance (EF) and entrepreneurial development (ED) as well as the moderating role of institutional finance agencies (IFA) in Nigeria. We employed a survey approach using questionnaires and interviews to elucidate information gathered from 450 entrepreneurs and five selected institutional finance agencies. In this regard, 450 questionnaires were circulated, and only 300 copies were retrieved from the respondents. Data retrieved was subject to examination using the bivariate correlation and multiple linear regression. The outcomes revealed that EF was strongly correlated and significantly related to ED. Furthermore, the test for the multicollinearity on the moderating role of institutional finance agencies indicated that IFA had a relationship with EF (R2 337, p < 0.05, β .581) and ED (R2 .384, p < 0.05, β .618). The result further indicated that IFA contributes significantly to both EF and ED. This study underscores the practical knowledge of EF and how it can lead to the ED of micro, small, and medium enterprises (MSMEs) and also provides adequate information on the institutional framework. JEL Classification : M1

Keywords

• Entrepreneurial Development
• Entrepreneurial Finance
• Institutional finance Agencies & MSMEs

References

1. Abereijo, I.O., Adegbite, S.A., Ilori, M.O., & Adeniyi, A. A., Aderemi, H.A. (2009). Technological Innovation Sources andinstitutional Supports for Manufacturing Small and Medium Enterprises in Nigeria. Journal of Technological Management Innovation, 4(2), 83-89. google scholar
2. Abdullah, M.A. (1999). "The accessibility of the government-sponsored support programmes for small and medium-sized enterprises in Penang," Cities, 16, 83-92. google scholar
3. Abiola, B., Adedoyin L., Abiola., T. O., & Godswill, O. (2020). Financial stability and entrepreneurship development in sub-Sahara Africa: Implications for sustainable development goals. Cogent Social Sciences, 6(1), 1798330, DOI: 10.1080/23311886.2020.179833. google scholar
4. Abor, J.Y. (2016). Entrepreneurial Finance for MSMEs: A Managerial Approach for Developing Markets. Palgrave Macmillan, 1-249, google scholar
5. Adebayo, G.S., & Kavoos, M. (2016). The present attitude of African youth towards entrepreneurship. International Journal of Small Business and Entrepreneurship Research, Published by European Centre for Research Training and Development. 4(1), 21-38. google scholar
6. Agrawal, A. C., Catalini A. (2014). Goldfarb., Some Simple Economics of Crowd funding National Bureau of Economic Research. google scholar
7. Agrawal, A., Catalini, C., & Goldfarb, A. (2010). Entrepreneurial Finance and the Flat-World Hypothesis. Evidence from Crowd-Funding Entrepreneurs in the Arts. working papers. Available online at http://www.netinst.org/Agrawal_Catalini_Goldfarb_10-08.pdf, 2010. google scholar
8. Ahsan M., Adomako S., & Mole KF. (2021). Perceived institutional support and small venture performance: The mediating role of entrepreneurial persistence. International Small Business Journal, 39 (1), 18-39. google scholar

9. Akande, O. (2012). Performance Analysis of Microfinance Banks on Women Entrepreneurs in Oyo state, Nigeria. Research Journal in Organi-sational Psychology and Educational studies, 168- 173. google scholar
10. Akande, O. O. Yinus, O. (2015). An assessment of micro finance banks impact on entrepreneurship development in Nigeria. International Journal of Advances in Management and Economics, 4(3), 148-154. google scholar
11. Akinbola, O.A., Sanni, S.A., & Akinbola, O.S. (2019). Entrepreneurship Support Agencies (ESA) and Development of Small and Medium. Economic Studies & Analyses / Acta VSFS, 13(1), 29-43. google scholar
12. Akpoviroro, K.S., Kadiri, B. (2018). An Investigation of the Role of Entrepreneurship Agencies for Entrepreneurship Development in Nigeria. Developing Country Studies, 8(6), 18-27. google scholar
13. Al Rahahleh, N., Ishaq Bhatti, M., & Najuna Misman, F., (2019). Developments in Risk Management in Islamic Finance: A Review. Journal of Risk Financial Management, 12(37), (https://doi.org/10.3390/jrfm12010037 google scholar
14. Ali, D.H.A., & Ali, A.Y.S. (2013). "Entrepreneurship development and poverty reduction: Empirical survey from Somalia," American Interna-tional Journal of Social Science, 2, 108-113. google scholar
15. Andriamahery, A., & Qamruzzaman, M. (2022). Do Access to Finance, Technical Know-How, and Financial Literacy Offer Women Empowerment Through Women’s Entrepreneurial Development. google scholar
16. Atandi, F.G., Bwisa, H., & Sakwa, M. (2017). Improving Savings Mobilization of Micro and Small Enterprises through Entrepreneurial Financial Literacy. International Journal ofAcademic Research in Business and Social Sciences, 7(2), 386-403. DOI: 10.6007/IJARBSS/v7-i2/2649 google scholar
17. Barbulescu, O., Nicolau, C. Munteanu, D. (2021). "Within the Entrepreneurship Ecosystem: Is Innovation Clusters’ Strategic Approach Boosting Businesses’ Sustainable Development?" Sustainability, 13(21), 11762. https://doi.org/ 10.3390/su132111762. google scholar
18. Barinua, V., & Olarewaju, V.O. (2020). The Impact of Skill Acquisition on Entrepreneur Development. Saudi Journal of Business and Management Studies, 7(5), 137-146. google scholar
19. Chidodo, E. (2015). Funds management on small - scale industries in Tanzania: a case of Dodoma municipality. Dodoma: The University of Dodoma, Dissertation (MA Business Administration 2015, http://hdl.handle.net/20.500.12661/729 google scholar
20. Daniel, W.W., & Terrell, J.C. (2006). Business Statistics for Management and Economics from Mathematics of Physics and Engineering, 2nd ed. McGraw Hill. google scholar
21. Ewan S. (2020). The Fourth Industrial Revolution - The Case of South Africa, Politikon, 47(2), 233-252. DOI: 10.1080/02589346.2019.1696003 google scholar
22. Falola, H.O., Adeniji., A.A., Adeyeye, J.O., Igbinnoba, E.E.,& Atolagbe, T.O. (2020). Measuring institutional support strategies and faculty job effectiveness. Heliyon, 6, 2-6 google scholar
23. Fowowe, B. (2017). Access to finance and firm performance: Evidence from African countries. Review of development finance, 7, 6-17. google scholar
24. Gompers, P. & Lerner, J. (2021). The Money of Invention, Harvard Business School Press, Boston. google scholar
25. Hanssens, J., Deloof, M., & Vanacker, T. (2015). Underexplored issues in entrepreneurial finance. In D. B. Audretsch, C. S. Hayter, & A. N. Link (Eds.), Concise guide to entrepreneurship, technology and innovation (219-223). Cheltenham (UK), Northampton (MA, USA): Edward Elgar Publishing. 219-223. https://doi.org/10.4337/9781783474202 google scholar
26. Hassan, M. A., & Olaniran, S.O. (2011). Developing Small Business Entrepreneurs through Assistance Institutions: The Role of Industrial Development Centre, Osogbo, Nigeria. International Journal of Business and Management, 6 (2), 213-226 google scholar
27. Hathaway, I., (2013). Tech starts: High-technology business formation and job creation in the United States. Ewing Marion Kauffman Foundation Research Paper. google scholar
28. Huang, L., & Knight, A. P. (2015). Resources and Relationships in Entrepreneurship: An Exchange Theory of the Development and Effects of the Entrepreneur-Investor Relationship. The Academy of Management Review, 42 (1), 80-104 google scholar
29. Ifionu, EP & Akinpelumi, O.F (2017). The Role of Entrepreneurial Financing on National Output: An Empirical Analysis. African Research Review, 11(3), 1620-177. google scholar
30. Inegbedion, D.O., Afolayan, M.O, & Opaleye, M.A. (2019). Empirical Analysis of Entrepreneurial Orientation and Financial performance in Selected Paint Manufacturing Firms in Lagos state, Nigeria. Global Scientific Journal, 7(9), 386-397 google scholar
31. Inegbedion D.O., & Oghojafor B.E.A. (2021). Entrepreneurship Education And Elimination Of Unemployment Among Graduates And Non-Graduates Of Tertiary Institutions In Nigeria. Journal of Women Empowerment and Studies, 01(02), 6-16. google scholar
32. Inegbedion, D.O Akande, O., Olalekan, A., Adeyemo, F., & Adebayo. A. (2021). The Effect of Financial Inclusion and Entrepreneurship Creation among Agency Banking. Empirical Investigation of Point of Sale (POS) Card Acceptance Operators in Nigeria: Special Reference to Lagos Metropolis. Journal of Southwest Jiaotong University, 57(5), 84-92. google scholar
33. Inegbedion, D., Asikhia, O., & James, O. (2022). Empirical assessment of entrepreneurial behavior and performance of micro, small and medium (msme) operators in Nigeria. Academy of Entrepreneurship Journal, 28(S5), 1-17. google scholar
34. Inegbedion, D.O., Olalekan, A., Adedugba, A., & Ebiere, K., (2022). Corporate philanthropy and firm performance: A moderating role of entrepreneurship & innovations: A case of Dangote group of company. Journal of Management Information and Decision Sciences, 25(S5), 1-14. google scholar
35. Inegbedion, D.O., Olalekan, A., & Adedugba, A. (2022). Does entrepreneurial strategies causes growth and survival of micro, small and medium scale enterprises (MSMEs) in Nigeria? A multi-correlational analysis. The Seybold report, 17 (08), 1878-1892. DOI 10.5281/zenodo.7039912 google scholar
36. Isaac O. A & Abimbola O.F., (2005). Innovative Approach to SME Financing in Nigeria: A Review of Small and Medium Industries Equity Investment Scheme (SMIEIS), Journal of Social Sciences, 11 (3), 219-227. google scholar
37. Jegede, C.T., & Irewole, I.E. (2020). Agencies for Entrepreneurship Development and SMEs’ Promotion in Nigeria. Revista CIMEXUS XV(2), 165-193 google scholar
38. Klonowski, D., (2014). Strategic Entrepreneurial Finance: From Value Creation to Realization (1st ed.). Routledge. https://doi.org/10.4324/9780203094976 google scholar
39. Lee, L., & Wong P.K., (2006). Entrepreneurship Education—A Compendium of Related Issues. The Life Cycle of Entrepreneurial Ventures, 79-105 google scholar
40. Li C, Ahmed N., Qalati SA., Khan A., & Naz S. (2020). Role of Business Incubators as a Tool for Entrepreneurship Development: The Mediating and Moderating Role of Business Start-Up and Government Regulations. Sustainability, 12(5), 1822. https://doi.org/10.3390/su12051822 google scholar
41. Maliti, B., & Mwewa, B.C. (2015). Determining the challenges for small and medium enterprises (SMEs) IN Accessing Financial Resources in a Rural District of Zambi using multivariate analysis. CLEAR International Journal of Research in Commerce & Management, 6 (12), 1-19. google scholar
42. Maria R.R., & Sugeng W. (2019). Entrepreneurial finance: financing antecedents and SMEs performance, Journal of Economics, Business, and Accountancy Ventura, 21 (3), 303 - 313 google scholar
43. Mehta, H.M., Qamruzzaman, Md., Serfraz, A. (2022).The Effects of Finance and Knowledge on Entrepreneurship Development: An Empirical Study from Bangladesh, The Journal of Asian Finance, Economics and Business, 9 (2), 409-418 google scholar
44. Morgan B., Elijah M., & Ngacho, C. (2019). Influence of Microfinance Financial Strategies On Growth Of Small And Micro Enterprises In Homa Bay County, Kenya. International Journal of Scientific & Technology Research, 8(5), 1-10. google scholar
45. Naseem Al., Rahahleh, M., Ishaq B., & Faridah N.M. (2019). "Developments in Risk Management in Islamic Finance: A Review," JRFM, MDPI, 12 (12), 1-22. google scholar
46. National Bureau of statistics (NBS) (2017). National survey of micro, small and medium enterprises (MSMEs) retrieved from SMEDAN, Downloads/5d3afc9GR1bb0651564146833.pdf google scholar
47. Njoroge C.W., & Gathungu, J.M. (2013). The effect of entrepreneurial education and training on development of small and medium size enterprises in Githunguri district- Kenya. International Journal of Education and Research, 1(8), 1-22 google scholar
48. Noor, S. & Isa, F.Md. (2020). Contributing factors of women entrepreneurs’ business growth and failure in Pakistan. International Journal of Business and Globalisation, 25(4), 503-518. google scholar
49. Nungsari, M., Ngu, K., Wong, D.N.S., Chin, J.W., Chee, S.Y., Wong, X.S., & Flanders, S. (2022). "Translating entrepreneurial intention to behaviour amongst micro and small entrepreneurs", Journal of Entrepreneurship in Emerging Economies, ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JEEE-11-2021-0429 google scholar
50. Odoom, D., Fosu, K.O., Ankomah, K., & Amofa, M.B. (2019). Exploring the contributions of microfinance institutions to the Ghanaian economy: A study at Takoradi, Journal of Economics and Sustainable Development, 1(1), 77-95 google scholar
51. Ogedengbe, F. A., Okhakhu, C. O., & Adekunle, S. A., (2015). Entrepreneurial education for sustainable development. Nigerian Journal of Management Sciences, 4(1), 78-87. google scholar
52. Okoro, J.P., Ngmendoma, A.B., Nasse, T.B., Carbonell , N., & Nanema, M. (2022). Entrepreneurship education and youth unemployment challenges in africa: Ghana in perspective. International Journal of management & entrepreneurship Research, 4(5), 213-231. google scholar
53. Osemeke, M.. Entrepreneurial Development and Interventionist agencies in Nigeria, International Journal of Business and Social Science, 3(8), 255-65. google scholar
54. Osemudiamen, I. D., Adedugba, A., Akinriola, O. O. & Ekperiwere, M. C. (2022). The mediating effect of organisational excellence on entrepreneurial orientation and performance in small and meddium sized enterprises in Lagos metropolises. Fuoye Journal of Management, Innovation and Entrepreneurship, 1(1), 231 - 242. google scholar
55. Oseni, E.F. (2017). The Relevance of Entrepreneurship Education to the Development of Micro, Small and Medium Enterprises (MSMEs) in Nigeria. Journal of public administration, finance and Law. 11, 137-144. google scholar
56. Robson, P.J., & Haugh, H.M., (2009). "Entrepreneurship and innovation in Ghana: Enterprising Africa," Small Business Economics, 32, 331-350. google scholar
57. Saidi, A.A., & Abideen A.T., (2017). Effect of Support for Entrepreneurship Development on Economic Growth and Development in Nigeria. European Scientific Journal, 13, 426-448 google scholar
58. Sanusi, J. O. (2001). "Welcome address on the launch of the Small and Medium Industries Equity Investment Scheme (SMIEIS)," Bullion: 25(3), Article 1. Available at: https://dc.cbn.gov.ng/bullion, 25(3/1). Retrieved 2/8/2022 google scholar
59. Shankar, S. (2019). The role of credit rating agencies in addressing gaps in micro and small enterprise financing. The case of India Book Unlocking SME Finance in Asia, ImprintRoutledge, 16 google scholar
60. Sheriff, M., & Muffatto, M. (2015)."The present state of entrepreneurship ecosystems in selected countries in Africa", African Journal of Economic and Management Studies, 6 (1), 17-54. https://doi.org/10.1108/AJEMS-10-2012-0064 google scholar
61. Taber, K.S. (2018). The Use of Cronbach’s Alpha When Developing and Reporting Research Instruments in Science Education. Research in Science education, 48, 273-1296 (https://doi.org/10.1007/s11165-016-9602-2 google scholar
62. Tambunan, T., (2008). "SME development, economic growth, and government intervention in a developing country: The Indonesian story," Journal of International Entrepreneurship, 2008, 6, 147-167. google scholar
63. Tetteh, L.A., Kwarteng, A., Gyamera, E., Lamptey, L., Sunu, P., & Muda, P. (2022). "The effect of small business financing decision on business performance in Ghana: the moderated mediation role of corporate governance system", International Journal of Ethics and Systems, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJOES-01-2022-0014 google scholar
64. Turner, P. (2021). Management During the Third Industrial Revolution: Asian Tigers and Global Players. The Making of the Modern Manager, 99-130 google scholar
65. Umadia K. Sr.,& Kasztelnik, K. (2020). The Financial Innovative Business Strategies of Small to Medium Scale Enterprises in Developing Country and Influence for the Global Economy Performance. Socio Economic Challenges, 4 (3), 20-32. google scholar
66. Wang, C.K Wong, P.K. (2004). "Entrepreneurial interest of university students in Singapore," Technovation, 24, 163-172, google scholar