Small and medium-sized enterprises (SMEs) play a crucial role in the economic development of many countries, including Nigeria. However, one of the significant challenges faced by SMEs is access to adequate financing. The purpose of this study was to examine the effect of different sources of financing on the financial performance of SMEs in Maiduguri Metropolis, Borno State, Nigeria. A descriptive survey research design was employed for this study, and data were collected from 400 SME owners/managers using structured questionnaires. The research instrument was validated and found to be reliable. Data analysis was conducted using descriptive statistics and inferential statistics (Analysis of Variance - ANOVA). The findings of the study revealed that bank loan financing had a statistically significant effect on the financial performance of SMEs in Maiduguri Metropolis. Informal financing sources also had a statistically significant effect on SME financial performance, while retained earnings financing had a significant effect on financial performance. However, government fund financing did not show a significant effect on the financial performance of SMEs. Based on the findings, it was recommended that financial institutions should reconsider their interest rate policies and streamline loan application processes. Also, SME owners are advised to reinvest a portion of their profits for future growth rather than using all earnings for personal expenses.
| Published in | Journal of Finance and Accounting (Volume 13, Issue 6) |
| DOI | 10.11648/j.jfa.20251306.15 |
| Page(s) | 282-296 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2025. Published by Science Publishing Group |
Bank Loan, Financial Performance, Retained Earnings, Small and Medium-sized Enterprises, Sources of Financing
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APA Style
Iliya, H., Anuforo, P. U., Bukar, B. I., Joel, M. (2025). Effect of Sources of Financing on Financial Performance of Small and Medium Scale Enterprises in Maiduguri Metropolis. Journal of Finance and Accounting, 13(6), 282-296. https://doi.org/10.11648/j.jfa.20251306.15
ACS Style
Iliya, H.; Anuforo, P. U.; Bukar, B. I.; Joel, M. Effect of Sources of Financing on Financial Performance of Small and Medium Scale Enterprises in Maiduguri Metropolis. J. Finance Account. 2025, 13(6), 282-296. doi: 10.11648/j.jfa.20251306.15
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Download@article{10.11648/j.jfa.20251306.15,
author = {Haruna Iliya and Peter Ugochukwu Anuforo and Bukar Ibrahim Bukar and Mathias Joel},
title = {Effect of Sources of Financing on Financial Performance of Small and Medium Scale Enterprises in Maiduguri Metropolis},
journal = {Journal of Finance and Accounting},
volume = {13},
number = {6},
pages = {282-296},
doi = {10.11648/j.jfa.20251306.15},
url = {https://doi.org/10.11648/j.jfa.20251306.15},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20251306.15},
abstract = {Small and medium-sized enterprises (SMEs) play a crucial role in the economic development of many countries, including Nigeria. However, one of the significant challenges faced by SMEs is access to adequate financing. The purpose of this study was to examine the effect of different sources of financing on the financial performance of SMEs in Maiduguri Metropolis, Borno State, Nigeria. A descriptive survey research design was employed for this study, and data were collected from 400 SME owners/managers using structured questionnaires. The research instrument was validated and found to be reliable. Data analysis was conducted using descriptive statistics and inferential statistics (Analysis of Variance - ANOVA). The findings of the study revealed that bank loan financing had a statistically significant effect on the financial performance of SMEs in Maiduguri Metropolis. Informal financing sources also had a statistically significant effect on SME financial performance, while retained earnings financing had a significant effect on financial performance. However, government fund financing did not show a significant effect on the financial performance of SMEs. Based on the findings, it was recommended that financial institutions should reconsider their interest rate policies and streamline loan application processes. Also, SME owners are advised to reinvest a portion of their profits for future growth rather than using all earnings for personal expenses.},
year = {2025}
}
TY - JOUR T1 - Effect of Sources of Financing on Financial Performance of Small and Medium Scale Enterprises in Maiduguri Metropolis AU - Haruna Iliya AU - Peter Ugochukwu Anuforo AU - Bukar Ibrahim Bukar AU - Mathias Joel Y1 - 2025/12/19 PY - 2025 N1 - https://doi.org/10.11648/j.jfa.20251306.15 DO - 10.11648/j.jfa.20251306.15 T2 - Journal of Finance and Accounting JF - Journal of Finance and Accounting JO - Journal of Finance and Accounting SP - 282 EP - 296 PB - Science Publishing Group SN - 2330-7323 UR - https://doi.org/10.11648/j.jfa.20251306.15 AB - Small and medium-sized enterprises (SMEs) play a crucial role in the economic development of many countries, including Nigeria. However, one of the significant challenges faced by SMEs is access to adequate financing. The purpose of this study was to examine the effect of different sources of financing on the financial performance of SMEs in Maiduguri Metropolis, Borno State, Nigeria. A descriptive survey research design was employed for this study, and data were collected from 400 SME owners/managers using structured questionnaires. The research instrument was validated and found to be reliable. Data analysis was conducted using descriptive statistics and inferential statistics (Analysis of Variance - ANOVA). The findings of the study revealed that bank loan financing had a statistically significant effect on the financial performance of SMEs in Maiduguri Metropolis. Informal financing sources also had a statistically significant effect on SME financial performance, while retained earnings financing had a significant effect on financial performance. However, government fund financing did not show a significant effect on the financial performance of SMEs. Based on the findings, it was recommended that financial institutions should reconsider their interest rate policies and streamline loan application processes. Also, SME owners are advised to reinvest a portion of their profits for future growth rather than using all earnings for personal expenses. VL - 13 IS - 6 ER -
Department of Accounting, University of Maiduguri, Maiduguri, Nigeria
Department of Accounting, University of Maiduguri, Maiduguri, Nigeria
Department of Accounting, University of Maiduguri, Maiduguri, Nigeria
Department of Accounting, University of Maiduguri, Maiduguri, Nigeria
