Effects of the Nigerian Capital Market on the Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria

Abstract

This study on “Effects of the Nigerian Capital market on the Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria” is intended to identify and consequently analyze the financial incentives available to MSMEs in the Nigerian capital market. It provides  solution to the financial gap existing between large scale enterprises and micro, small and medium scale enterprises in terms of availability of financial resources referred to as the missing middle. The methodology adopted in conducting the research was a survey design. The independent variable of the study was the Nigerian capital market while the dependent variable was the MSMEs. A disproportionate stratified random sampling technique was adopted to select a representative sample of one hundred   MSMEs in Lagos state being the centre of commerce in Nigeria. Questionnaire was used as instrument for data collection. The questionnaire was developed on a five-likert scale ranging from one to five (i.e. from strongly disagree to strongly agree) while, the hypothesis developed was tested using Chi-square (X²).  Data analysed using the statistical technique called chi-square to test the hypotheses of the study. Base on the findings, it was  recommended that, the government through the Nigerian Capital Market should create an Alternative Stock Exchange-that is, Dedicated Stock Exchange for MSMEs as done in the developed countries like USA, Japan, China, Malaysia, Morocco and many other countries which has changed their economic fortunes, also, the management of small and medium scale businesses  should prepare timely, transparent and acceptable financial reports of their companies which would be acceptable to regulators, investors and stakeholders especially financial institutions and in addition to innovative financing mechanisms, innovative measures can also be put in place to share risk.

Keywords: Capital Market, Missing Middle, Entrepreneurship Financing, Capital Accumulation, Financial Gap