Dynamics of Small Business in an Emerging Market: Challenges and Opportunities

Small-scale enterprises have and will continue to play a vital role in economic development of both developed and developing countries, small business is considered the driver of economic growth. This role includes infrastructure development, employment, reduction in poverty, wealth creation and development of human capital. Government of African Nations have developed and implemented various policies aimed to stimulate and grow entrepreneurial development; however these businesses still face various challenges during the introduction stage as well as the growth stage of the businesses. This paper examined the challenges that small-scale enterprises face in Nigeria during the early stages and also explore opportunities that these businesses could derive from their immediate environment. The study employed cross sectional survey method and analysis of variance (ANOVA) to analyze seventy one (71) copies of questionnaire returned from the field. The findings revealed that lack of access to finance and unfavorable macroeconomic environment still remain the major challenge faced by small businesses in Nigeria and that age and size of the businesses play significant role in all of this. The study therefore recommends that the SMEs funding agencies should not adopt a blanket financing option for all categories of business in terms of age and sizes within the economy. Rather, policies aimed at promoting the performance and growth of micro and small enterprises should adopt a sectional approach. Thus, resources for each category would address the most critical determinants of performance and growth in focal sub-category such as micro, small or medium enterprises