VENTURE CAPITAL FINANCING AND THE GROWTH OF SMES IN KOGI STATE

Small and Medium-Sized Enterprises (SMEs) are essential drivers of economic growth and job creation. However, access to adequate financing remains a major challenge for SMEs in Kogi State, Nigeria, limiting their ability to expand and sustain operations. Traditional financing options such as bank loans are often inaccessible due to high collateral requirements and interest rates. As a result, venture capital financing has emerged as a viable alternative to support SME growth. This study examines the effect of venture capital financing—specifically venture capitalists and business angels on the growth of SMEs in Kogi State. The study adopts a quantitative research methodology, employing structured questionnaires to collect data from 268 SMEs operating in the state. The data were analyzed using descriptive statistics and multiple regression analysis. The findings reveal that venture capitalists ((? = 0.228, p < 0.000) and business angels (? = 0.542, p < 0.000) positively and significantly impact SME growth by providing financial resources, mentorship, and strategic guidance. Based on these findings, the study recommends that the government of Kogi State, through relevant agencies, should create enabling policies and incentives (such as tax reliefs and co investment schemes) to attract more venture capital firms to invest in the SME sector. The study also, recommends that Stakeholders should encourage the formation and formalization of business angel networks within Kogi State.

0 18 May, 2025

pg: 12

JBMIC PORTAL SYSTEM

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