Review of Financial Challenges of Nigerian Entrepreneurs in an Attempt to Reduce Financial Institutions Risk Perception Index of Small Firms: Evidence from Survey Data

Abstract

The success of an entrepreneur`s search for credit facility depends highly on his ability to reduce risk perception of fund providers of small firms.  Three variables (financial management information skills, the prior banking relationships and the level and quality of collateral constitute risk reducing factors, which an owner-manager must package properly in a feasibility study to put his case for loan applications better.  Also, access to credit facility is significantly affected by historic profit performance. Inability of the owner manager to face these challenges would force him to face up-hill tasks in accessing external financing.  The paper recommends that small businesses should first; increase their level of knowledge in accounting/financial management skills, be assisted by way of public policy guarantees so as to reduce the stringency of conditionalities imposed on them for such facilities.

Key words: Financial challenges, Financial needs, entrepreneur, Risk perception, Investors action