Socio-Cultural Factors Affecting the Performance of Micro and Small Scale Enterprises in Anambra and Abia States, Nigeria

Abstract Micro and Small Scale Enterprises (MSSEs) have been generally acknowledged as engines for sustainable economic growth and development. Efforts to promote MSSEs in developing countries may be traced to as far back as the 1950s. Recently, Nigeria has shown increased interest in the establishment, enhancement and promotion of this sector in which about 70% of the population is currently engaged. Thus the promotion and development of MSSEs for increased performance have remained a primary concern of successive governments in Nigeria resulting in a number of policies, programmes, credits and financial supports for the sector. Despite these policy supports, the sector remained ‘notoriously volatile’ and experienced a high degree of non performance. Previous research on MSSEs performance had focused mostly on the skills necessary for survival, growth and performance of business organizations while relegating socio-cultural and organizational environment to the background. However, the findings of Drafke and Kossen have shown that such factors could be one possible explanation for the non performance of MSSEs in Nigeria. Consequently, the general objective of this study was to identify the socio-cultural factors affecting the performance of MSSEs in Anambra and Abia States of Nigeria. The crosssectional survey design was adopted. The study was carried out in Anambra and Abia states of Nigeria because of high concentration of MSSEs activities in these states. The study population consisted of the officially registered MSSEs in Anambra and Abia states, numbering 2,658 and 1,950 respectively. The sample size of 1,104 respondents (operators) was selected using multi-stage sampling techniques. The major survey instrument was questionnaire, complemented by In-depth Interview (IDI). Face validity of the questionnaire instrument was done by 5 experts in Sociology, Anthropology and Social Work departments, who are all members of academic staff of the University of Nigeria, Nsukka. The internal reliability of the items in the survey instruments was determined using Cronbach’s Alpha, and reliability co-efficient of 0.89 was obtained. Quantitative data were analysed using Statistical Package for Social Science (SPSS). Descriptive statistics and inferential statistics were used to describe and interpret the data. The research hypotheses were tested using chisquare (χ 2 ) statistics since most of the data collected were categorical variables. Qualitative data were analysed using thematic method. Verbatim quotes were used to complement the results of the quantitative data. Crime rate was identified as the major social and environmental factor negatively affecting MSSEs performance as indicated by 57.2% of operators. Both male (73.8%) and female (64.4%) operators encountered financial constraints due to unwillingness of the banks to grant them long-term loans. There was low level of awareness of government policies (20.1%). More than half of operators (51.6%) had negative perception of government policies as they saw it as indirect way to levy taxes on them. As high as 90.2% of operators had not benefited from government policies. Ignorance and stringent collateral requirements were the reason for their not benefiting from government policies. There was no statistically significant relationship between positive perception of government policies and better performance (p >.05). Significant relationship existed between education and performance (p < .05). There was significant difference in business location and performance in terms of annual profit (p < .05).