NIGERIA: A CONCEPTUAL FRAMEWORK FOR FINANCING SME DEVELOPMENT IN DEVELOPING COUNTRIES

Abstract

Even though SMEs are the engine of growth in every economy around the world, Nigeria has

yet to see the most powerful wave of development powered by these SMEs. This study aims to

combine the theories of financial resource-based view theory, resource-based view theory,

and social capital theory to present a conceptual framework for determining small and

medium-sized firm development (SMEs). The framework was developed based on a survey of

literature on various internal and external finance sources that promote the development of

SMEs. The focus of this study is on the issue of SMEs' insufficient financial resources, which

hurts their promising developmental prospects. Despite its conceptual nature, this study

contributes to the literature by addressing the existing finance gap that impedes SME

development and attempts to diagnose the problem in light of both internal and external

financing sources. The proposed framework will aid policymakers and other stakeholders in

enhancing lending and related technologies for SMEs financing and SMEs' owners in

locating alternate and dependable sources of funding to pursue their development goals.