Lease Financing and Growth of Small & Medium Enterprises in Federal Capital Territory of Nigeria

Abstract

The purpose of this paper is to investigate whether lease finance if adequately available, can grow the operations of SMEs in the six area councils of the Federal Capital Territory of Nigeria. The study adopted a survey research design taking a sample of 195 SMEs with owners/operators as the respondents. Chi square test was employed and results from the analysis disclosed that: one, inadequate finances militates against the growth of SMEs; two, usage of Leasehold Machineries/Equipment improves the operations of SMEs; and three, lease financing can enhance the growth of SMEs in Nigeria. Therefore, the policy implication is that the government should encourage availability of leased machineries and equipment to SMEs, through lease finance guarantee scheme to improve their operations, which can enhance their contribution to economic development of the country.