Determinants of Investment in Non-current Assets in Small and Medium Manufacturing Enterprises in Nigeria

Abstract

The study examines the determinants of non-current assets acquisition in Small and Medium Scale Enterprises (SMEs) in Ondo state, Nigeria. Ondo state was selected for the study because it is one of the developing states in Nigeria. It is the highest cocoa producing state in Nigeria and also one of the Oil producing states. It has a sizeable number of SMEs in the manufacturing sector. A survey research method was employed for this study. A sample of 250 SMEs was purposively selected for the study, out of which 208 returned the completed questionnaire representing a response rate of 83%. Regression Analysis was used to determine the relationship of the identified determinants and non-current assets investment. The study revealed a negative relationship (r = -0.10, p < .0.05) between family size and non-current assets acquisition among entrepreneurs while the level of education shows a positive relationship (r = 0.111, p < 0.05). However loan size shows more significant relationship with non-current assets acquisition (r = 0.471, p < 0.05). The study concluded that provision of necessary non-current assets for business operations is imperative for the growth of SMEs. Loan with low interest rates should be made accessible to SMEs so as to enhance the contribution of this sector to the social and economic goals of the country.