Year 2019, Volume 6, Issue 2, Pages 72 - 81 2019-06-30

MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA

Muhammad M. Ma’aji [1]

37 55

Purpose - Despite the reported high bankruptcy rate among small businesses (SMEs) in Nigeria, this study is the first to develop failure prediction models specifically for SMEs using financial and non-financial variables.

Methodology - The study employed logistic regression to a sample of 344 SMEs during the period 2000–2014.

Findings- The increased in the predictive accuracy of the model shows that data relating to the age of business and location make a significant contribution. Additionally, the study finds that high leverage and operational expenses and low profitability are associated with SMEs failure. The prediction accuracy rate was 92.1 and 93.8 percent for model 1 and model 2 respectively.

Conclusion- The findings will serve as an early warning signal for management to take proactive measures to overcome the threats of failure. Financial institutions such as banks will benefit from this study as it will help them set their internal control systems and procedures to manage credit risk for SMEs.

Business failure, financial ratios, non-financial information, logistic regression, small medium-sized enterprises
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Primary Language en
Subjects Management
Journal Section Articles
Authors

Orcid: 0000-0003-0787-6411
Author: Muhammad M. Ma’aji (Primary Author)

Dates

Publication Date: June 30, 2019

Bibtex @research article { jefa584067, journal = {Journal of Economics Finance and Accounting}, issn = {}, eissn = {2148-6697}, address = {PressAcademia}, year = {2019}, volume = {6}, pages = {72 - 81}, doi = {10.17261/Pressacademia.2019.1046}, title = {MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA}, key = {cite}, author = {Ma’aji, Muhammad M.} }
APA Ma’aji, M . (2019). MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA. Journal of Economics Finance and Accounting, 6 (2), 72-81. DOI: 10.17261/Pressacademia.2019.1046
MLA Ma’aji, M . "MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA". Journal of Economics Finance and Accounting 6 (2019): 72-81 <http://dergipark.org.tr/jefa/issue/46520/584067>
Chicago Ma’aji, M . "MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA". Journal of Economics Finance and Accounting 6 (2019): 72-81
RIS TY - JOUR T1 - MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA AU - Muhammad M. Ma’aji Y1 - 2019 PY - 2019 N1 - doi: 10.17261/Pressacademia.2019.1046 DO - 10.17261/Pressacademia.2019.1046 T2 - Journal of Economics Finance and Accounting JF - Journal JO - JOR SP - 72 EP - 81 VL - 6 IS - 2 SN - -2148-6697 M3 - doi: 10.17261/Pressacademia.2019.1046 UR - https://doi.org/10.17261/Pressacademia.2019.1046 Y2 - 2019 ER -
EndNote %0 Journal of Economics Finance and Accounting MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA %A Muhammad M. Ma’aji %T MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA %D 2019 %J Journal of Economics Finance and Accounting %P -2148-6697 %V 6 %N 2 %R doi: 10.17261/Pressacademia.2019.1046 %U 10.17261/Pressacademia.2019.1046
ISNAD Ma’aji, Muhammad M. . "MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA". Journal of Economics Finance and Accounting 6 / 2 (June 2019): 72-81. https://doi.org/10.17261/Pressacademia.2019.1046
AMA Ma’aji M . MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA. JEFA. 2019; 6(2): 72-81.
Vancouver Ma’aji M . MODELLING BUSINESS FAILURE AMONG SMALL BUSINESSES IN NIGERIA. Journal of Economics Finance and Accounting. 2019; 6(2): 81-72.