ISSN: 2226-3624
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This research examined the effect of entrepreneurship (proxied by micro, small and medium scale enterprises) financing on unemployment rate in Nigeria. The annualized time series for 17 years were obtained from the Central Bank of Nigeria Statistical Bulletin and the National Bureau of Statistics. This paper employed ex-post facto design, which relied on secondary data from 2001 to 2017. A stationarity test was done to check Unit Root and normality test was conducted to ensure normal data distribution. Though the series attained stationarity at level and after first differencing could not be integrated of same order (indicated absence of long-run association); hence Vector autoregressive (VAR) estimation was employed in analyzing the modified model. The estimates indicated that bank credit to micro, small and medium scale enterprises (MSMEs) did not have positive and significant effect on the Nigeria employment market. The results also indicated that bank lending rate and inflation rate did not have positive and significant influence on unemployment rate. This implied that funds that accrued to MSMEs were not adequate as to stimulate activities in the subsector let alone reducing the high unemployment rate in the country during the review period. Conclusively, since MSME is a prominent subsector that can drive the Nigeria economy, rising lending rate retards their development and overall economic relevance; hence the government and monetary authorities should come up with brilliant policies and create friendly business environment for MSMEs to do better. Access to finance should also be simplified and obtainable at a lower lending rate.
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In-Text Citation: (Okolie, Anidiobu, & Ugwuanyi, 2018)
To Cite this Article: Okolie, P. I. P., Anidiobu, G. A., & Ugwuanyi, W. N. (2018). Entrepreneurship Financing and its Effect of Unemployment Rate in Nigeria: The Msmes’ Perspective, 2001 – 2017. International Journal of Academic Research in Economics and Management Sciences, 7(3), 251–266.
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