ASSESSMENT OF INVESTMENT DECISIONS AND FINANCIAL PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN FEDERAL CAPITAL TERRITORY, NIGERIA

Abstract

This study evaluated the Assessment of Investment Decisions and Financial Performance of Small and Medium Enterprises in the Federal Capital Territory, Nigeria. Multi-stage sampling technique was adopted and used. Data were collected through the use of structured questionnaires from 400 sampled SMEs. Data were analyzed using, Descriptive Statistics, Correlation Matrix and Logit Regression Model. The results show there is a positive correlation between annual return i.e. financial performance and new property acquisition and a negative correlation existed with new plant and acquisition. The result of the logit model shows that the factors influencing investment decisions among SMEs were the coefficient of education (P<0.01) probability level. The coefficient of the competition level was negative and statistically significant at (P <0.05). Furthermore, the coefficient of the initial investment capital (P<0.05). The coefficient of the infrastructure was positive and statistically significant at (P<0.05). Therefore, the study recommends that Policy should be formulated towards educating and training SMEs owners to have more knowledge about business enterprise operations in order to be able to assess their financial performance, external funding and capital should be provided to SMEs at a lower and affordable interest rate, SMEs owners should be encouraged to be willing to invest more into their business to expand their business for more profit, local polices and local infrastructure to enhance SMEs participation in Federal Capital Territory AMAC should be provided. Media blitz could also be harnessed to augment policy awareness among SMEs.

JEL Classification Codes: GQ321.