nternal Organisational Factors and Access to Finance of Small and Medium Enterprises in Lagos State, Nigeria

Access to finance is a critical factor for the survival, growth, and development of Small and Medium Enterprises (SMEs) worldwide. However, empirical evidence from the literature has revealed that SMEs face signicant challenges in accessing nance, often encountering issues such as stringent collateral security requirements, prolonged loan processing times, limited loan amounts, high interest rates, and low loan approval success rates. These challenges have been attributed, in part, to the non-adoption of internal organizational factors, including management expertise, quality of nancial reports, operational efciency, rm size, and rm age. Previous studies have attempted to clarify the obstacles faced by SMEs and the associated potential solutions. However, majority of these studies have concentrated on industrialised nations rather than on emerging economies like Nigeria. Hence, this study examined internal organisational factors and access to nance of Small and Medium Enterprises in Lagos State, Nigeria. Survey research design was adopted for this study. The population comprised 42,067 owners/managers of SMEs in Lagos State, Nigeria. A sample size of 495 was determined using Cochran formula. Stratied random sampling technique was adopted in selecting respondents. A structured and validated questionnaire was utilized for data collection with Cronbach's alpha reliability coefcients for the constructs ranged from 0.702 to 0.973. The response rate was 90.7%. Data were analysed using the descriptive and inferential (structural equation model) statistics at a signicant level of 5%. Findings revealed that internal organisational factors had a statistically signicant effect on access to 2 nance (Adj.R = 0.596; F (5,443) = 133.139., p < 0.05) of Small and Medium Enterprises in Lagos State, Nigeria. The study concluded that internal organisational factors improved SMEs access to nance in Lagos State, Nigeria. The study recommended that owners/managers of SMEs should proactively invest in strengthening internal organizational factors such as management expertise, nancial reporting quality, operational efciency, rm size, and rm age, recognizing their profound impact on enhancing access to nance.