Tag Archives: debt structure

Financial Gap and Sustainable Government Financial Interventions to Small and Medium Scale Enterprises in Nigeria: Developing a Sustainable Framework (Published)

Citation: J. F. Adegoke , N.N. Nwankpa, L. A. Bakare, S. A. Tijani, and O. J. Zubair (2022) Financial Gap and Sustainable Government Financial Interventions to Small and Medium Scale Enterprises in Nigeria: Developing a Sustainable Framework, International Journal of Business and Management Review, Vol.10, No.1, pp.25-43

Abstract: The Nigerian government, having considered the oil price volatility and the need to address its high reliance of its budget on oil, by diversifying the economy, has embarked on a series of programmes and reforms to boost non-oil sector of the economy, most importantly, the SME subsector. Financing interventions of government would have ordinarily been a succor to change the narrative of ugly financial accessibility of SMEs, but, the level of accessibility and its relationship to SMEs have largely been understudied. Hence, this study seeks to examine the deficiencies in the government interventions to SMEs and present a workable financial intervention framework. Both primary and secondary data were used for this study. Primary data were gathered through the administration of questionnaires. Purposive sampling technique was adopted to select 100 registered SMEs in each of the six states of the Southwest Nigeria, while 100 unregistered SMEs were equally selected for inclusiveness totaling 700. The data were analyzed using both descriptive and inferential analytical methods with the aid of SPSS. The study has documented the deficiencies of the previous interventions to include poor design of the programme, favoritism in the disbursement of financing facilities, low level of awareness of the facilities, difficulty in the procedures for accessing government financing support. The study thus proposed a framework where the guarantee scheme is designed into result-based financing where the designated scheme will just give guarantee to the banks to provide loan without collateral and with reduced interest, and a first-time loan which will be jointly financed by the banks and the scheme.

Keywords: Finance, Small and Medium Sized Enterprises, Sustainability, debt structure, interventions

Firms Debt Structure and Shareholder Returns: Moderating Role of Foreign Director of Multinational Companies in Nigeria (Published)

Financing decision is one of the important areas in managerial finance to increase shareholders’ wealth. Firms can use either debt or capital to finance their business. This study uses two-stage least squares model and examines the impact of foreign directors as moderating variable on the relationship between firm debt structure and shareholders’ returns of quoted multinational firms in Nigeria.  Secondary data were extracted from the annual reports of six (6) most active quoted multinationals firms on the Nigerian Stock Exchange for the period 2006 to 2018. After running the OLS regression, a robustness test was conducted for validity of statistical inferences. A multiple regression was employed using PCSE regression model and FGLS regression model respectively for model one and two. The study documents in model one that debt to total asset has a positive and significant effect on shareholder returns while debt to equity and debt to turnover have negative and significant effect on shareholders returns though foreign director has no significant impact of shareholder returns. The model two, revealed the moderating role of foreign director, where the debt to equity has a positive and significant effect on shareholder returns while debt to turnover revealed a negative and significant effect on the return to shareholder funds. Though, debt to total asset has no significant effect on shareholders returns. In line with the findings, the study recommended that board of directors of the study firms should ensure that listed multinationals firms in Nigeria should appoint foreigner in their board composition so that the interest of various shareholder’s would be fully protected by avoiding unnecessary debt and proper management of the company debt file and sales improve upon their turnover and reduction of unnecessary cost.

Keywords: Multinational Firms, Nigeria, debt structure, shareholder returns