| Abstract | For several decades, Nigeria has relied on crude oil exports as a primary source of foreign exchange revenues. However, recent government initiatives to boost the non-oil export sector have not produced significant results. Limited access to financial support from Deposit Money Banks and a lack of innovative financing options have been identified as major constraints on non-oil exporters' ability to achieve their full potential.
This study aims to critically evaluate the impact of various financing sources—including internal funds, credit facilities from deposit money banks, government-backed finance through development banks, supplier trade credit, informal financial support from friends and relatives, and non-bank financial institutions—on the export performance of SMEs involved in non-oil exports in Nigeria. Additionally, the research identifies and evaluates key financing constraints, specifically collateral requirements, high interest rates, inflexible loan conditions, and administrative bureaucracy, assessing how these barriers affect SMEs' access to external financing.
This study is grounded in financing constraints theory, information asymmetry theory, social capital theory, and dynamic capabilities theory. It develops a comprehensive conceptual framework that integrates these theoretical perspectives to elucidate the relationships between financing sources, constraints, and export performance. A quantitative research design, guided by a positivist philosophical approach, was employed. Primary data were collected through a structured questionnaire utilising a 5-point Likert scale, administered to SMEs engaged in non-oil export activities and registered with the Nigerian Export Promotion Council. The data analysis was conducted using multiple linear regression, Pearson correlation analysis, and the chi-squared test of independence.
The empirical findings indicate a significantly positive relationship between external financing sources—including financial support from friends and family, deposit money banks, federal government finance schemes through development banks, and non-bank financial institutions—and the export performance of SMEs. Conversely, internal funding and supplier trade credit negatively affect export outcomes. Furthermore, the analysis reveals that stringent collateral requirements, high interest rates, and lengthy administrative processes substantially impede SMEs’ access to external finance. Notably, the results highlight that the duration of experience that SMEs have in the domestic market significantly enhances their ability to secure external financing for export ventures.
This research contributes to the existing literature by extending the discourse on financing constraints, particularly through exploring non-traditional financing sources such as social capital and government-backed financial instruments. The study validates the dynamic capabilities theory by demonstrating that extensive domestic market experience enhances SMEs' capacity to secure external funding and refines the financing constraints theory by identifying specific barriers, such as collateral demands and administrative inefficiencies, faced by Nigerian SMEs. Furthermore, the proposed conceptual framework for innovative export financing offers a novel synthesis of theoretical insights, providing a robust foundation for future research in resource-dependent economies. These findings present valuable implications for policymakers, suggesting targeted interventions to optimise financing mechanisms and enhance SMEs’ non-oil export performance in Nigeria.
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