Volume 61, Issue 338, May - August 2025

Impact of Foreign Finance on Revenue Growth of Small and Medium Enterprises in Lagos, Nigeria

Hector Onyekachi EKEOCHA^1♦, Folorunsho MEJABI², Israel ORISANWO³

¹Department of Accounting and Finance, Mountain Top University, Prayer City, Ogun State, Nigeria
²Department of Accounting and Finance, Mountain Top University, Prayer City, Ogun State, Nigeria
³Department of Accounting and Finance, Mountain Top University, Prayer City, Ogun State, Nigeria

^♦Corresponding Author
Department of Accounting and Finance, Mountain Top University, Prayer City, Ogun State, Nigeria

ABSTRACT

This study examines the impact of foreign finance on the revenue growth of small and medium enterprises in Lagos, Nigeria. Pecking Order Theory and the Resource- Based Theory were adopted and the link between foreign finance and SME’s performance variables was hypothesized. From the population of 5,344, survey design and random sampling technique were used to obtain the sample size of 361. Primary data were collected with the aid of a questionnaire on a five-point Likert scale distributed through hard and electronic means to SME’s in Lagos State. Both descriptive and inferential statistics with regression analysis were employed to examine the hypothesis with the aid of Statistical Package for Social Sciences. It was revealed that foreign finance elements of foreign direct investment (FDI), foreign venture capital (FVC), foreign loan (FL) and foreign grant (FG) had significant positive impact on the performance of SME’s in Lagos State. Revenue growth and foreign finance were significant with adjusted R2 = 0.929, F = 940.483, and p < 0.050, and FDI leading the elements with FVC showing insignificant impact. This implies that SME owners can draw on the empirical evidence and conclusions of this study to explore foreign finance as an alternative source to conventional domestic and government sources. SME’s can draw insight from this study to engage in structuring their business to attract foreign investors. The study fills existing gap and provides foundation for further research on moderating role of firm characteristics such as management practices and industry type in determining the impact of foreign financing on SME performance as well as explore how foreign finance can drive internationalisation of Nigeria SME’s.

Keywords: Small and Medium Enterprises (SME’s), Foreign Finance, SME’s Performance, Revenue Growth

Discovery, 2025, 61, e21d3127

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DOI: https://doi.org/10.54905/disssi.v61i338.e21d3127

Published: 11 July 2025