Business Environment and Small and Medium Enterprises Performance: Pragmatic Evidence from Oyo State, Nigeria

Abstract

The dynamic and rapidly changing business environment in which most businesses operate has made a significant impact on organizational survival and performance. This study seeks to examine the impact of the business environment on SMEs' performance in Nigeria with particular reference to Oyo State. A survey of 153 randomly selected SMEs from three cities in every three senatorial zones of Oyo State. The data collection instrument was a questionnaire designed for the study. Descriptive statistics and Multiple Regression were used to analyze the data. The results reveal that the business environment has a significant impact on SMEs' performance. Furthermore, the results also show that infrastructural facilities accessibility, financial related problems, technological changes and attitude of people to locally made products are the most environmental factors militating against SMEs survival in Nigeria. Subsequently, the study recommends that government should do the needful in terms of provision of infrastructural facilities and implantation of National Financial Inclusion Strategy (NFIS) of making sure that a financial system is accessible to all Nigerian adults, at an inclusion rate of 80%, and to promote the country’s economic growth.