Pages: (137-156 )
Abstract
mall and Medium Scale enterprises have been identified as an important driver of economic growth and development. SMEs however do not exist in a vacuum. As such the operational environment of an enterprise is of considerable relevance to its performance. Consequently, this study investigated the effect of business environment and the financial performance of small and medium scale enterprises in Abia State. The study adopted a six-point likert scale questionnaire. The total population for the study was 1534 registered SMEs. Stratified random sampling was adopted to obtain a target population of 925 SMEs from five selected LGAs in Abia State. Taro Yamane sample size was adapted to sample 318 SMEs from the sample frame. Descriptive statistics and Ordinary Least Squares Regression was used to analyze data obtained from the field survey. Based on the empirical findings, the study concluded that business environment has a significant effect on the financial performance of SMEs in Abia State. The study therefore recommended that small and medium scale enterprises that wish to grow and survive beyond five years, should inform itself on the business environment factors prevalent in the state to successfully formulate strategies for improved performance.
Keywords: SMEs, Financial performance, Business Environmental,