Effects of Financial Bootstrapping Techniques on Operational Performance of Small and Medium-Sized Enterprises (SMEs) in Lagos State

Accessing credit from the conventional banks has been one of the major challenges of Small and Medium-Sized Enterprises (SMEs) in achieving their goals and objectives. This has made SMEs not able to achieve their operational objectives from time to time, thus affecting overall performance of the business. The SMEs operators are forced to design methods which funds could be raised to finance the operational activities. The study investigated the effects of financial bootstrapping techniques on the performance of SMEs in Lagos State. Owner-related finance, delaying payments and customer-related finance were adopted as the financial bootstrapping techniques while operational performance is viewed from the angle of business operations. The study employed survey research design with simple random sampling method. Questionnaire was used as a research instrument for primary source of data collection. 226 copies of questionnaires were administered to SMEs operators in Lagos State, but 219 copies were returned. The findings of the regression analysis revealed that owner related finance and customer-related finance have significant effect on operational performance of SMEs in Lagos State. Delaying payments has no significant effect on operational performance of SMEs in Lagos State. The study recommended that SME operators focus more on owner-related and customer-related financing techniques, and that they consider utilising delaying payment techniques.