Inventory Funding Of Small And Medium Scale Manufacturing Organisations: The Nigeria Experience

Abstract

The funding of inventory is crucial to the effective operation of any manufacturing organisation whether large or small. In most cases the issue of funding of working capital of SMEs has not been given much attention in the financing of inventory by various initiatives aimed  at funding the SMEs . Two hundred and fifty SMEs were selected for this study in Lagos, Oyo and Ondo states of Nigeria. Two hundred and twenty one returned the questionnaire. It is established in this study that inadequate funding of working capital has contributed to low capacity utilisation and low growth rate of SMEs.  It is recommended that funding of inventory should be given more attention in various government initiatives in enhancing the growth of SMEs. Also SMEs should explore other sources in financing inventory rather than rely mainly on formal banking sector for the financing of their inventory

Keywords: Small and Medium Scale Enterprises, Inventory, Organisation, Capacity Utilisation, Operating Cycle, Working Capital