Abstract:
Deciding on suitable financing strategies to support small and medium-sized construction firms (SMCFs) can be a challenging task. This study aimed to assess the financing strategies utilized by SMCFs in Abuja and propose additional strategies to enhance their financial support. A mixed-method research methodology was employed, involving the distribution of 85 structured questionnaires and conducting semi-structured interviews with 10 managers from relevant organizations, including SMCFs and development financial institutions (DFIs) in Abuja metropolis.
The findings revealed the top five internal sources of finance for SMCFs: cash management account, high-yield savings account, specialty savings account, owner capital, and money market accounts, with mean scores of 4.506, 4.212, 3.588, 3.106, and 2.706, respectively. Additionally, the main five external sources of finance were identified as competitive funding grants, the Development Bank of Nigeria (DFI), bill payable trade credit, 14 days treasury bills, and family angel investors, with mean scores of 4.435, 4.329, 4.329, 4.176, and 3.882, respectively.
Furthermore, the primary drivers of sources of finance for SMCFs were found to be the quaternary sector of the economy (Information Services), operational (feasibility and viability report), corporation, limited liability company (LLC), and people, with mean scores of 4.553, 4.259, 4.235, 4.141, and 4.012, respectively. On the other hand, the significant barriers to accessing finance for SMCFs included untimely loan sanctioning, unavailability of intellectual property, insurance policies, changes in management systems, and inadequate business information, with mean scores of 4.388, 4.376, 4.365, 4.353, and 4.341, respectively.
The study also categorized key factors considered in developing financing strategies based on period (short, medium, and long-term) and ownership (internal and external sources). Moreover, the drivers for the selected managers varied depending on policy direction, leadership style, and institutional mandate, while the barriers were similar, involving information and communication gaps and failure to meet criteria requirements.
Considering the significance of small and medium businesses in the Nigerian economy, stakeholders such as policymakers, decision-makers, planning officers, and entrepreneurs should approach financing options for SMCFs with an open mind, ethical considerations, and effective repayment plans to ensure sustainability. The study’s results can aid decision-making by providing valuable insights into various finance sources, enhancing access to financing options, and discovering innovative solutions to unlock capital sources for SMCFs with limited financial inclusion awareness.
Evaluating Financing Strategies for Small and Medium-Sized Construction Firms in Abuja. GET MORE, ACTUARIAL SCIENCE PROJECT TOPICS AND MATERIALS
