INFRASTRUCTURAL DEVELOPMENT AND PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) IN OSUN STATE, NIGERIA

Abstract

Infrastructural development is one of the essential problems facing small and medium-scale enterprises in Nigeria. This study examines effect of infrastructural development on the performance of SMEs in Osun State. The study used a descriptive research design based on a cross-sectional survey. The study collected data using a questionnaire. Krejcie & Morgan's (1970) statistical table was used to obtain a sample size of 357 from the population of 3,007 SMEs owners and managers in the selected senatorial districts of Osun State. 343 copies of questionnaire were retrieved and used for the analysis. The data were analyzed using Structural Equation Modeling (SEM). Findings revealed that all had a positive and significant impact on the performance of SMEs. It was found that electricity infrastructural (β = 0.034, C. R = 0.049, p < 0.005), transportation infrastructural (β = 0.015, C. R = 1.224, p < 0.005), and telecommunications infrastructural (β = 0.137, C. R = 2.939, p < 0.005). The study concluded that infrastructural development has significant and positive effects on the performance of SMEs. Therefore, the study recommended that government should ensure that the right policies are implemented to guarantee a steady and sufficient supply of power, upgrade the road networks, as these will enhance the performance of SMEs in Nigeria and subsequently promote economic growth in the country. Small and medium-scale enterprises (SMEs) should be trained in ICT usage, since doing so will enhance their performance and ultimately increase the profitability of conducting business on a small to medium-scale enterprises.