Access to Finance and Attrition Relationship of Small and Medium Textile Firms in Nigeria

This study focused on the relationship between access to finance and attrition in small and medium textiles firms in Nigeria. The study became necessary due to the moribund nature of the textile industry in Nigeria. The sector was the second largest employer of labour but declined rapidly in productivity between 1991 and 2000, with 80 textile firms closing shop. The study takes a firm specific approach to help investigate the source of decline. Commentators on the causes of the downward trend in the textile industry had mentioned many perceived factors including access to finance. The purpose of this study is to isolate access to finance and to subject it to more intensive investigation. To do this effectively, a sampling frame which contained the list of the collapsed and standing firms was obtained from the textile manufacturers association of Nigeria based in Kaduna. All the selected firms were of medium category. A purposive sampling was used to enlist 3 entrepreneurs each from both failed and successful textile firms and 10 senior managers of failed and 4 senior managers of successful firms for a pilot study. Using a snow-balling technique, 196 respondents comprising owners and senior managers from failed firms were administered semi-structured & unstructured questionnaire whilst 160 questionnaire were also administered on owners and senior managers from successful firms. A total of 232 questionnaire were retrieved representing 65% of questionnaires sent out. The statistical tools used for testing are correlation, ANOVA and Regression. The analysis shows that the correlation between access to finance and the attrition of textiles industries in Nigeria implying a strong negative relationship between access to finance and the attrition of textile industries in Nigeria. It is recommended that textile industries take advantage of the most recent source of financing which is the Nigeria industrial bank. Financial discipline needs to be practiced by textile entrepreneurs in order to distinguish between company funds and personal funds.