Anyanwu (2001) defined entrepreneurship as the act of organizing and effectively managing risk-prone factors of production for profitability and sustainable growth of businesses.
SMEs in Nigeria started with private-sector indigenization in 1956, when the British Colony established Federal Loans Board to control credit facilities. In early 1970s, FG initiated the small-scale industries scheme, including loan policies implemented by the NBCI and NIDB (Onah., 2004). By 1980, the government earmarked a Special Fund in support of SMEs. NERFUND was launched in 2001 and has been functional till date.
SMEDAN, the umbrella body for SMEs in Nigeria, was established in line with the American-style Small Business Administration (SBA). The agency has head offices in all 36 states and is helping entrepreneurs with strategic road maps that are capable of reviving declining businesses (Adeloye., 2010).
Adeyemi and Abiodun (2014) argued that SMEs in Nigeria thrived between 1960 and 1980s because the economy depended on agriculture prior to the oil boom and its attendant Dutch Disease. By 2016, the oil-dependent economy plunged into recession—the worst since 1983. The inflation rate between September 2016 and January 2017 was 19%. A constant decline in GDP is also an indication of low performance in the real sector (Karaian., 2017).
Figure 3: Annual GDP Growth between 1983 to 2016
Source: National Bureau of Statistics (2017)
Although Nigeria’s GDP growth rate stood at 9.2% before the 2016 recession, SMEs have borne the brunt with salary cuts, downsizing, and outright closure for under-capitalized businesses.
Infrastructural development has, unfortunately, made a mockery of the proceeds from oil and gas since 1956, a situation which endemic highlights corruption, administrative incompetence and lack of commitment among policymakers as the “real problems” (Bonga., 2010).