Comparative Analysis of Internal and External Financing Sources and Entrepreneurial Performance in South East, Nigeria (Published)
This study examines the comparative effects of internal and external financing sources on entrepreneurial performance in Nigeria. Entrepreneurial ventures require adequate financing for establishment, growth, innovation, and sustainability. However, many Nigerian entrepreneurs face severe financing challenges due to limited access to credit, high interest rates, inadequate collateral, and unstable economic conditions. The study comparatively evaluates internal financing sources such as personal savings, retained earnings, family contributions, and cooperative funding against external financing sources including bank loans, venture capital, government grants, trade credit, and microfinance loans. The study adopts a descriptive survey research design and relies on secondary and empirical literature relevant to entrepreneurial finance in Nigeria. The population of the study comprised of 21320 SME in the studied states. The sample size of 392 was drawn from the population of the study using Taro Yamani sample size determination method Findings reveal that internal financing sources promote managerial independence, flexibility, and reduced financial risk, while external financing sources enhance expansion, innovation, and business scalability. However, external financing often exposes entrepreneurs to repayment burdens and financial constraints due to high interest rates and strict lending conditions. The study concludes that a balanced financing structure combining internal and external sources significantly improves entrepreneurial performance in Nigeria. Based on the findings and conclusion of the study, we, therefore, recommended improved access to affordable credit facilities, government support policies, financial literacy programs and the strengthening of financial institutions to support entrepreneurial development.
Keywords: Comparative Analysis, Entrepreneurial Performance, Innovation, SMEs, South-East, Sustainability, external financing sources, internal financing sources