Effect of Personal Networking on the Performance of Small-Scale Enterprises in South-West Nigeria

Abstract

This study investigated the effect of personal networking on the performance of small-scale enterprises (SSEs) in South-West Nigeria, addressing the challenges faced by SSEs in accessing resources, market information, and funding due to inadequate institutional support. Given the importance of personal networking, spanning social, business/professional, and institutional ties, the assessed their effect on business performance in a region where informal networkings often substitute for formal systems. Specifically, the study examined the effect of social, business/professional, and institutional networkings on business performance. Using a descriptive survey research design, and with a population of 235,222 registered SSE owners, data were collected from 519 small enterprise owners across six South-West Nigerian states through structured questionnaires. The study applied simple linear regression analysis to test the hypotheses that personal networking significantly affected business performance. Findings showed that all three dimensions of networking, social (0.970), business/professional (0.951), and institutional (0.889), positively affect the performance of the SSEs from the study areas. The study concluded that personal networking played a vital role in enhancing the growth and sustainability of SSEs by providing access to critical resources and fostering innovation. Based on these results, the study recommended that SSE owners prioritise building strong personal networking, including using digital platforms for social networking, and engage in professional associations and institutional collaborations to strengthen market positioning and access to resources.