Benue State University, Makurdi

BUSINESS ENVIRONMENT AND PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN BENUE STATE, NIGERIA

¹Ekeh Ojotu Loveday & ²Mohammed Muntaka

Department of Business Administration,
School of Business and Management Studies,
Benue State Polytechnic, Ugbokolo,
Benue State,
ekeloveday@gmail.com


²Department of Business Management,
Faculty of Management Sciences,
Federal University,
Wukari,
Taraba State,
Muntaques4real@gmail.com

Abstract

SMEs do not operate in a vacuum but in an environment that is complex, multi-faceted and dynamic. The complexity and dynamism of the business environment impacts on the performance of such SMEs in Nigeria. How the business environment support or hinder the performance of SMEs has been studied with mix research findings reported. This study contributes to this debate by examining the effect of external business environment on the performance of SMEs in Gboko metropolis. Three hypotheses were tested whereby external business environment was proxied as political environment, economic environment and socio-cultural environment. The study adopted a cross-sectional research design on a population of 1,811 owners of SMEs in Benue State. Sample size was however 327 while questionnaire and multiple regression was method of data collection and analysis respectively. The study found that the political environment, economic environmental and socio-cultural environment all have a significant effect on the performance of SMEs in Benue State. The study recommended that the government and the regulatory authorities should create an environment that will be viewed as contributing to the improvement of the performance of SMEs as a favourable political, economic and socio-cultural environment contributes to SME performance

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