Preference in Sourcing Business Financing in Maiduguri Metropolis: Evaluation of the Differences among Micro, Small and Medium Enterprises (MSMEs)
Abstract
Business financing is one of the major areas of concern to potential and established business owners. Small businesses in particular, face many challenges in making choices on which source of finance could be used the study, therefore, evaluates the differences in preference among small businesses in Maiduguri metropolis with regards to sources of generating finance. Data were collected through the administration of a structured questionnaire to small business owners where a sample of 310 respondents were drawn using Krejcie and Morgan small sample technique from a population of 1595 registered small businesses in Maiduguri. The finding of the study shows that among the four sources of finance utilized in the study only personal savings varies significantly among entrepreneurs of small business other three sources of business financing loan from friends and relatives, loan from non-bank financial institutions and loan from banks vary insignificantly among entrepreneurs. Based on the findings the study recommends that government should encourage small business owners by providing soft loans with low-interest charges so that they can be motivated and adopt it to expand their business instead of relying mostly on personal savings where expansion is minimal or difficult.