Dimensions of risk factors in micro, small and medium agribusinesses: Evidence from Northwest, Nigeria
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Abstract
Micro, Small and Medium Scale Enterprises (MSMEs) is a key factor in promoting private
sector development and partnership in Nigeria thus the main engine of economic growth and economic development.The study intend to answer the research question, what are the major risks of concerns of micro, small and medium scale agribusiness enterprises in North-Western Nigeria? Multistage sampling procedure result to random selection of three States, 515 MSMEs stratified into micro (190), small (256) and medium (69) agribusiness enterprises. Data were collected using primary and secondary sources. Descriptive statistics and Principle Component Analysis (PCA) through STATA package were employed to achieve objective of the study. Analysis of indicators of the major risks faced by MSMEs revealed that the mean scores of the most important risks associated with micro agribusiness were financial stress (4.37) and effect of ill-health (4.22); in small
agribusiness, social capital (3.68) and menace of kidnapping and banditries (3.62) and
medium enterprise encountered difficulties of credit access (3.68) and social capital
problem (3.62). The estimation of the exploratory factor analysis in micro enterprise
showed that politico-economic and social risks explained about 68% of variation of risks.
The scree criterion in small enterprises suggested that between 1 and 3 factors should be retained given that there were apparent inflexion points at the second and third factor. In medium enterprise, using an oblique rotation, a one-factor solution was identified to be optimal and was found to explain about 54% of variation of risks. This indicates that medium agribusinesses were characterized by socio-economic and political risks which were related one to the other.The study revealed that MSM agribusiness enterprises were faced by one-dimensional but varied socio-economic and political risks. Effective polices on political and socio-economic development that will address agribusiness challenges are canvassed from the state and federal agencies and legislators.
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