The Effect of High-Interest Loans on SME Survival: A Case Study of Poultry Farmers in Plateau State
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
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- NGN 5000
Background of the Study
Small and Medium-sized Enterprises (SMEs) are vital to the economy of Nigeria, particularly in agriculture, where they provide livelihoods, employment, and contribute to local food production. However, one of the major challenges faced by SMEs, especially in the poultry farming sector, is accessing affordable financing for business operations and growth. High-interest loans, often provided by banks or microfinance institutions, pose a significant burden for small-scale poultry farmers in Plateau State. These high rates can limit the ability of farmers to invest in necessary resources, such as feed, equipment, and veterinary services, and may ultimately affect their ability to sustain and expand their businesses (Adekunle & Ogunleye, 2024).
The focus of this study is to assess the impact of high-interest loans on the survival of poultry farming SMEs in Plateau State. It will evaluate whether these loans serve as a barrier to business sustainability and profitability or if they provide the necessary capital for growth despite their high costs.
Statement of the Problem
Poultry farmers in Plateau State often rely on loans to finance their operations. However, the high interest rates attached to these loans make it difficult for many SMEs to thrive, as they struggle to repay the loans while also covering the high operational costs associated with poultry farming. The impact of high-interest loans on the long-term viability and profitability of poultry farms is not well understood, and further research is needed to explore this critical issue.
Objectives of the Study
- To assess the effect of high-interest loans on the survival of poultry farming SMEs in Plateau State.
- To analyze the challenges faced by poultry farmers in repaying high-interest loans.
- To recommend alternative financing solutions that could enhance the sustainability of poultry farming SMEs in Plateau State.
Research Questions
- What is the effect of high-interest loans on the survival and profitability of poultry farming SMEs in Plateau State?
- What challenges do poultry farmers face in repaying high-interest loans?
- What alternative financing solutions can improve the sustainability of poultry farming SMEs in Plateau State?
Research Hypotheses
- H0: High-interest loans do not significantly affect the survival of poultry farming SMEs in Plateau State.
- H0: Poultry farmers do not face significant challenges in repaying high-interest loans.
- H0: Alternative financing solutions do not significantly improve the sustainability of poultry farming SMEs in Plateau State.
Scope and Limitations of the Study
The study focuses on poultry farming SMEs in Plateau State and examines the effect of high-interest loans on their survival. Limitations include potential variations in loan terms, loan amounts, and the economic conditions faced by different farms, which may influence the findings.
Definitions of Terms
- High-Interest Loans: Loans that come with high interest rates, making them more expensive for the borrower to repay.
- SMEs (Small and Medium-sized Enterprises): Businesses that maintain revenues, assets, or employees below a certain threshold, often focusing on specific sectors such as agriculture.
- Poultry Farmers: Individuals or businesses involved in raising domesticated birds, such as chickens, turkeys, and ducks, for meat or egg production.
