IIARD International Institute of Academic Research and Development

WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH (WJFIR )

E-ISSN 2550-7125
P-ISSN 2682-5902
VOL. 9 NO. 1 2025
DOI: 10.56201/wjfir.v9.no1.2025.pg90.109

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Improving The Effectiveness of MSMES Through the Adoption of Appraisal Techniques in Real Asset Investments: Empirical Evidence from South-South Geo-Political Zone.

Ogbulu, O.M., Udensi, C.E., Okanta, S.U., Uruakpa, P.C., Onoh J. & Paul N.

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Abstract

There is no doubt about the strategic importance of entrepreneurship as represented by micro, small and medium enterprises (MSMEs), in both developing and developed economies. As a result, both governments and transnational institutions have been unrelenting in the pursuit of policies and programmes that ensure MSMEs’ effectiveness and sustainability. But despite the efforts of both governments and transnational institutions, the actualization of the strategic roles of MSMEs remains a source of controversial narratives. Unfortunately, however, while so much attention is given to such factors as finance and infrastructure, the issue of managerial competence seems to receive disproportionate attention. This study focused on the decision- making orientations of MSMEs with particular reference to their adoption of capital appraisal techniques which belong to the analytical approach to decision making. Specifically, the study investigated the degree of awareness and extent of usage of investment appraisal techniques by MSMEs. In addition, the study identified the nature of the relationship between the adoption of investment appraisal techniques and the quality of decision making. Based on descriptive survey of 690 MSMEs from five states in the South-south geo-political zone, viz, Akwa Ibom, Delta, Edo, Rivers and Bayelsa, the hypotheses were tested with multinomial and ordinal logistic regression. The findings of the study include the fact that the extent of usage of investment appraisal techniques by MSMEs is low which derives from the low level of awareness of the techniques. In addition, it was established that there is a significant and positive relationship between the adoption of the techniques and the quality of decision making. The study, therefore, concluded that in spite of the manifest benefits of appraisal techniques, its diffusion among small scale businesses is low. This obviously points to some underlying policy de

Investment appraisal technique, rational, adoption, awareness, MSMEs

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ACKNOWLEDGEMENT: The funding for the research that generated this paper was
provided by TETFUND under National Research Fund intervention.

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