THE IMPACT OF FINANCING ON THE GROWTH OF SMALL AND

MEDIUM-SIZED ENTERPRISES: A CASE STUDY OF CHICKEN

REPUBLIC

Student Name: Aishat Abisola Ashimolowo

Student ID: 22304141
BAMCWF1 RESEARCH PROPOSAL
 RATIONALE OF THE STUDY
•Small and Medium-sized Enterprises (SMEs) play a crucial role in driving economic growth, employment generation, and
innovation (Quartey and Oguntoye, 2020). However, access to finance remains one of the most significant challenges faced
by SMEs, hindering their growth and development (Fang et al., 2020). The problem identified in this study is the impact of
financing on the growth of SMEs, specifically focusing on Chicken Republic, a well-known fast-food chain in Nigeria.

•The importance of this problem cannot be overstated, as SMEs contribute significantly to the Nigerian economy,
accounting for a substantial portion of the country's Gross Domestic Product (GDP) and employment (Onugu, 2005).
Limited access to finance can stifle the growth and expansion of SMEs, ultimately hampering their ability to contribute to
economic development and job creation (Eniola and Entebang, 2015).

•Several studies have been conducted on the impact of financing on SME growth, both in Nigeria and globally. Quartey et
al. (2017) examined the financing challenges faced by SMEs in Ghana, highlighting the need for improved access to finance
to foster their growth and development. Fang et al. (2020) investigated the relationship between financing and SME growth
in China, emphasizing the importance of diversifying financing sources. However, there is a need for more context-specific
studies that explore the impact of financing on SME growth in the Nigerian fast-food industry.
 RATIONALE OF THE STUDY CONT’D
•This study relates directly to my academic pursuits in entrepreneurship and business management. As an
aspiring entrepreneur, understanding the financing challenges faced by SMEs and their impact on growth is
crucial for developing effective strategies to overcome these obstacles. Furthermore, my work experience in
the fast-food industry has provided me with valuable insights into the unique challenges and opportunities
faced by businesses in this sector.

•The reasons for selecting this topic are multifaceted. Firstly, the fast-food industry in Nigeria is rapidly
growing, and Chicken Republic, as a prominent player, offers a pertinent case study for examining the impact
of financing on SME growth (Akpan et al., 2021). Secondly, this study has the potential to contribute to the
existing body of knowledge by providing a context-specific analysis of the Nigerian fast-food industry.
Finally, the findings of this research could inform policymakers, financial institutions, and SME owners about
the importance of accessible financing and its role in fostering sustainable economic growth.
 AIM OF THE RESEARCH

• The research aims to critically examine the impact of financing on the growth of small and medium-sized
enterprises: A case study of Chicken Republic
 OBJECTIVES OF THE STUDY

Based on the aim of the research, three potential objectives of the study on "The impact of financing on the
growth of small and medium-sized enterprises: A case study of Chicken Republic" could be:

•1. To evaluate the various sources of financing utilised by Chicken Republic and their contribution to the
company's growth.

•2. To examine the challenges faced by Chicken Republic in accessing finance as a small and medium-sized
enterprise (SME).

•3. To assess the impact of financing on key performance indicators of Chicken Republic, such as
investment, employment growth, and innovation.
 LITERATURE REVIEW

The key concepts of this research revolve around the impact of financing on the growth of Small and Medium-sized Enterprises (SMEs), with a
specific focus on the case study of Chicken Republic, a prominent fast-food chain in Nigeria. The purpose of the research can be broken down
into the following headings:
• Fast-food Industry and SME Growth
The fast-food industry in Nigeria is rapidly growing, and Chicken Republic, as a prominent player, offers a pertinent case study for examining
the impact of financing on SME growth. Akpan et al. (2021) analyzed the challenges facing the fast-food industry in Nigeria, including
competition, supply chain management, and operational efficiency. Exploring the financing challenges and opportunities within this specific
industry context can provide valuable insights for policymakers, financial institutions, and SME owners.
• Financing Sources and SME Performance
The availability and suitability of financing sources play a crucial role in the performance and growth of SMEs. Beck and Demirguc-Kunt
(2006) examined the impact of different financing sources, such as bank loans, equity financing, and trade credit, on SME growth. Their
findings suggest that access to a diverse range of financing options is essential for SMEs to thrive and contribute to economic development.
Abor and Quartey (2010) studied the role of bank financing in SME growth in Ghana, highlighting the need for financial institutions to tailor
their products and services to meet the unique needs of SMEs.
• Challenges and Barriers to SME Financing
Despite the recognized importance of access to finance for SME growth, several challenges and barriers persist. Eniola and Entebang (2015)
explored the challenges faced by SMEs in Nigeria, including limited collateral, lack of financial management skills, and high-interest rates.
Ayyagari et al. (2008) investigated the financing constraints faced by SMEs across various countries, emphasizing the need for policy
interventions to address these barriers and promote SME growth.
 METHODOLOGY

• Deductive Research Approach

The deductive research approach involves developing a theoretical or conceptual framework based on existing knowledge and then testing it
through empirical observation (Saunders et al., 2019). In this study, the deductive approach would involve reviewing the existing literature on
SME financing, growth, and related concepts to develop hypotheses or propositions about the relationship between financing and the growth of
SMEs, specifically in the context of the fast-food industry and Chicken Republic.
The deductive approach is suitable for this research because it allows for the formulation of clear hypotheses or propositions that can be tested
empirically using data from the Chicken Republic and other relevant sources. These hypotheses or propositions could be derived from existing
theories or models related to SME financing and growth, such as the pecking order theory (Myers and Majluf, 1984) or the life cycle theory of
firm growth (Berger and Udell, 1998).
 METHODOLOGY CONT’D

• Positivist Research Philosophy:

The positivist research philosophy assumes that reality is objective and independent of the researcher's beliefs or perceptions (Saunders et al.,
2019). This philosophy is often associated with quantitative research methods and the use of scientific methods to test hypotheses and draw
conclusions.
In the context of this study, a positivist research philosophy would involve approaching the research objectively, collecting and analyzing
numerical data related to Chicken Republic's financing sources, growth indicators (e.g., revenue, employment, asset growth), and other
relevant variables. The researcher would then use statistical techniques to test the hypotheses or propositions derived from the existing
literature and theories.
The positivist philosophy is appropriate for this research because it aligns with the deductive approach and the goal of identifying causal
relationships between financing and SME growth. By collecting and analyzing quantitative data, the researcher can objectively measure the
impact of different financing sources on Chicken Republic's growth and potentially generalize the findings to other SMEs in the fast-food
industry or beyond.
 METHODOLOGY

•Design: A correlational research design would be best for this study to examine Chicken Republic's financial
sources (independent variables) and growth and performance (dependent variables) (Harrison, Reilly, and Creswell,
2020).

•Methods: To gather data for this quantitative study, the following methods can be employed:

1. Survey: Conduct an organized questionnaire of Chicken Republic's financial managers, executives, and other
stakeholders to learn about financing sources, quantities received, and growth and performance metrics over
time (Cerqueira-Streit et al., 2021).
2. Archival Data Analysis: Assessing Chicken Republic's financial statements, investor reports, and other
pertinent articles to determine quantitative data on financing sources, investments, revenue, employment, and
other growth and performance indicators (Saunders et al., 2015).
 METHODOLOGY CONT’D

• Participants: Chicken Republic executives, finance managers, and other stakeholders with financial and operational
data would be the main participants. A survey, which involves analyzing everyone in a population, such as the financial
department, is one option due to the organization's modest size (Zahoor et al., 2022).

• Validity and Reliability: To enhance the validity and reliability of the quantitative research, the following measures
can be taken:

1. Instrument Validation: Pilot testing, expert content validity assessment, and internal consistency (e.g., Cronbach's
alpha) are necessary to verify the questionnaire's reliability and validity (Kruger et al., 2024).
2. Data Cleaning and Validation: Reviewing the gathered data for precision, thoroughness, and uniformity, and
resolving any absent or incorrect data using suitable statistical methods (Tariq et al., 2020).
3. Reliability Analysis: Performing statistical analyses, like test-retest reliability or parallel-forms reliability, to evaluate
the consistency and stability of the measures employed in the research (Harrison, Reilly, and Creswell, 2020).
 METHODOLOGY CONT’D

• Data Analysis: Descriptive statistics like means, standard deviations, and frequencies are useful for
summarising the data. Inferential statistical methods such as correlation analysis, multiple regression
analysis, or structural equation modeling can be utilized to explore the connections between financing
sources and growth/performance indicators for Chicken Republic (Ologbenla, 2021).

• Ethical Consideration: Considerations regarding ethical matters encompass maintaining the

confidentiality and anonymity of participants, securing informed consent, upholding participants' privacy
and rights, and mitigating potential risks or harm. Before commencing the research, it is imperative to
secure approval from an institutional review board (IRB) or ethics committee as outlined by Orimadegun
(2020).
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