Small and Medium Enterprises (SMEs) are recognized all over the world as backbone of modern economies because they make major contributions to global economic growth and sustainable development through employment generation, poverty alleviation, wealth creation and food security. It is the recognition of the important roles played by SMEs that has resulted in increased attention and education on the approach to develop and sustain a viable SMEs sector. Bubou, Siyanbola, Ekperiware & Gumus (2014) stressed that any effort geared towards advancing any economy without a particular emphasis on adequate government support for the development of small and medium scale business, is likely not to produce favorable outcomes in the long term. This owe to the fact that government support programmes creates important contextual conditions which facilitate the capacity of SMEs to contribute to development through the production of goods and services and the creation of employment. Eniola & Entebang (2015) believed that SMEs in emerging economy particularly in Nigeria are plaques with high rate of failure and underperformance due to inadequate financial support. Hence, government consciousness needs be stirred to align with the reality undermining the actualization of the full economic potentials of this sector.
Before Nigerian gain Independence, the business environment was almost completely in the hands of Colonial and other European multinational companies such as Lever Brothers Company, GB Olivant, United African Company (UAC), Patterson Zechonics, Leventis and many others. These firms were only concerned with bringing in finished goods from their parent companies overseas to Nigeria. These companies demonstrated vast business experience and strong capital base and controlled the Nigerian economy. The government of those days all supported them to become stronger by providing incentives such as favorable tariff and tax concessions (Ayozie, Jacob, Umukoro & Ayozie, 2013).
Government supports are programmes developed to facilitate and stimulate success of business activities of SMEs (Shamsuddoha & Ali, 2006; Awojide, 2015). It is important to note that venture support programmes and initiatives by various governments are responsible for different levels of success in various countries around the world. In Korea for instance, government support programmes were found to be instrumental in the development of the SME sector and the industrialization of the country. Moreover, in China SMEs increased the economic status of nearly 200 million people from severe poverty as the result of the economic reform in 1979 (World Bank Group). In the case of Singapore, SMEs account for more than 50 per cent of the economic output and contributed 70 per cent of total employment (Government Enhances Support). Fatoki (2014) stressed that SMEs are plagued with weak growth, including lack of financial and knowledge resources, therefore government support programmes become crucial to overcome some of these constraints. This is mainly challenging, given that SMEs are often acknowledged as a primary tool for creation of economic values; and their increasing social and environmental impacts are highly significant. Government venture development programmes are major mechanism required to aggressively stimulate the growth of SMEs. However, the volatile economic environment and infrastructural deficit have adversely affected SMEs in Nigeria. Driving developmental programmes among SMEs is considered as a major strategic task in the many developed nations and SMEs are given a place prominence particularly because they contribute to nation wealth by creating new jobs, markets, industries, technology and net increases in productivity leading to equitable distribution of income and higher standard of living for the populace (Jahanshahi, Nawaser, Khaksar & Kamalian, 2011).
Considering the enormous potentials of the SMEs sector and despite the acknowledgement of its immense contribution to sustainable economic development, its performance still falls below expectation in many developing countries (Okonkwo & Obidike, 2016). This suggests that despite the existence of many SMEs support programmes that provide backing to SMEs, they continue to experience high failure rate (Ihua, 2009; Kehinde, Abiodun & Adegbuyi, 2016). This raises questions on whether the SME owner/managers have the adequate government financial support to manage the SMEs in a manner that enhances growth and survival or not. While the contribution of financial assistance is not in doubt, however, there is a little empirical evidence in Nigeria on the extent to which financial assistance improves performance of SMEs under SMEDAN. Also, the analysis techniques adopted by most studies, which had been either qualitative or quantitative, hence mixed method approach is adopted in this study. Therefore, the study seeks to provide a comprehensive evaluation of the impact of financial assistance on SMEs performance, investigate the reasons why financial support designed by government to boost SMEs performance are yet to fully achieve their desired objectives.
Statement of Problem
One of the major goals of government support programmes is to foster growth and enhance the performance of SMEs. Though research on government support from outside and within Nigeria context indicates a favorable outcome. However, the rising failure rate of SMEs has suggested a contrary effect. Furthermore, studies have revealed that only 5% of businesses that are newly established survive the first five years in Nigeria (Fatoki, 2014). Similarly, Gbandi & Amissah (2014) stressed that though SMEs in Nigeria dominate more than 90% of Nigerian firms, their role and contribution to the nation's GDP is below 10%. Therefore, it is possible that there may be a gap between the implementation of government support programme and eventual actualization of it intended outcome. Therefore, with a particular reference to operators of SME in Nigeria, there is a need to re-examine the extent to which the implementation of these support programmes affects the performance of SMEs. Previous studies such as (Adegbuyi, 2016; Taiwo, Falohun & Agwu, 2016) have focused mainly on financial and technological support. However other salient contextual factors such as market support, training support, advisory support and the mediating role of commitment, have been overlooked.
Also, it is important to state that researchers have advocated financial assistance to facilitate progress and enhance the performance SMEs (Ihua, 2009). Nevertheless, considering the very vital role finance play in the development of SMEs, there is a need to situate the assessment of the effects of finance empirically in a...