EFFECT OF VENTURE CAPITAL FINANCING ON THE GROWTH OF SMALL AND MEDIUM-SIZED ENTERPRISES IN NIGERIA, 2000 - 2020

Abstract

This study examined the effect of venture capital financing on the growth of small and medium scale enterprises in Nigeria. Other specific objectives include to: investigate the effect of total savings of deposit and lending rates on total sectoral distribution of SMEs in Nigeria and ascertain the effect of prime average deposit and lending rates on total sectoral distribution of SMEs in Nigeria. The study adopted ex post facto research design. The data was obtained from central bank statistical bulletin (CBN). The hypotheses were tested using ARDL approach. Findings shows that total savings of deposit and lending rates had a positive and non-significant effect on SMEs growth in Nigeria and prime average deposit and lending rates had a negative and non-significant effect on SMES growth in Nigeria. The study concluded that venture capital financing had a positive/negative and non-significant effect on SMEs growth of Nigeria. Based the findings’ following recommendation was reached that government should come out with a clear policy on SMEs. There should be a firm choice between state sponsorship without control, autonomy of SMEs without assistance and state sponsorship with their total savings of deposit and lending rate and government and its development prime average deposit and lending rates whereby SMEs would be taught at all levels of especially at small business within the states