Financing Sources and Performance of Small Scale Businesses in Delta State

Abstract

The research focuses on financing sources and the performance of small scale business in Delta State. These financing sources were the independent variables used for the study. Performance which was the dependent variable, was measured using sales level and profitability. Stratified random sampling technique was used to determine the sample size of 148. Primary data was sourced from the respondents through a four-point Likert type structured questionnaire. Simple percentages, tables and charts were used to analyse the data. Pearson product moment correlation coefficient was used to test hypothesis 1- 5 while the sixth hypothesis was tested using multiple regression since it had more than one independent variable and it seeks to measure the predictive power of the independent variable over the dependent variable. It was found that all the sources of finance have positive and significant relationship with the performance of small scale business enterprises, with the exception of personal savings, that is positive but not significant in relationship with the performance of small-scale business enterprises. It was also found that the overall model (all the sources of finance combined) can predict the performance of small scale business enterprise and the overall coefficient regression shows that personal savings has a more predictive ability compared to other sources of finance. The study recommends enlightenment and encouragement of small scale business owners by government agencies to enable them utilize other sources of finance for business operation. The study contributes to knowledge in providing empirical evidence on sources of financing and the performance of small scale businesses in Delta state.