Page 1 of 9
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 07
August 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 420
Constraints of ICT Adoption in Nigerian Small and
Medium Scale Enterprises
Jegede Charles Temitope (PhD)
Institute for Entrepreneurship and Development Studies Obafemi Awolowo University Ile-Ife,
Osun State, Nigeria
Abstract
Information and Communication technology
(ICT) plays a critical role in facilitating
socio-economic development in small and
medium scale enterprises in developed and
developing countries. In recent years, the
increase in ICT adoption has significantly
changes the manner in which organizations
operate and communicate.
However, SMEs in Nigeria have not reaped
the benefit derived from ICT adoption as
compare to advanced nations. This papers
review literature in ICT and SMEs. It also
examines constraints of ICT adoption to
SMEs in Nigeria. The paper concludes that
government should address these constraints
in order for SMEs to reap the full benefits
offer by ICT adoption.
Keywords: Constraints, Information
Communication Technology, ICT adoption,
ICT Solution, Organizational Planning, Small
and Medium Scale Enterprises,,
Introduction
ICT is fast becoming one of the main drivers
of change in SMEs. It has transformed and
changed the way people work and
communicate in organizations. According to
Ion and Andre (2008), ICT enables
companies to communicate, collaborate and
conduct transactions internally with their
customers and suppliers as well as
distributors via the internet.
Apulu (2009) asserts that ICT has brought
about changes in the way businesses are
conducted among SMEs as they play major
role in storing, retrieving, processing and
disseminating information. However, SMEs
90% of Nigeria SME are not utilizing ICT
due to some challenges. Such as cultural
barriers, lack of capital, cost
implementation, low level of education,
government policies, low level of education
government policies, lack of electricity etc.
It is on this note that this paper review
literature in SMEs, ICT adoption and
Page 2 of 9
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 07
August 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 421
constraints of ICT adoption is small and
medium scale enterprises in Nigeria.
Objectives of the Study
The objectives of the study are to
i. review literature on SMEs
constraints in Nigeria.
ii. review literature on the roles of ICT
Adoption in SMEs in Nigeria.
iii. identify the constraints of ICT
adoption in SMEs in Nigeria ; and.
iv. recommend solutions to ameliorate
the of constraints ICT adoption in Nigerian
small and medium scale enterprises.
v.
Literature Review
Small and Medium Scale Enterprises
SMEs are regarded as the main sustenance
of the economy because of its capacity in
enhancing the economy output and human
welfare in a country (Akingbola, 2006).
Gbolahan et al. (2010) regards SMEs as
firms that have fewer employees and a lower
turnover and assets than large firms such as
multi-national companies.
Rahman (2001) ascertains that SMEs are
defined by a number of factors criteria such
as location, size, age structure, organization
number of employees, sales volume, worth
of assets, ownership, through innovation and
technology.
Varying definitions among countries may
arise from differences in organizational at
different levels of economic development.
For example, the Department of Business
Enterprise and Regulating Reform (BERR)
(2007) uses the following definitions.
Microfirm: 0-9 employees: small firm; 0-49
employees; medium firm: 50-249
employees; 50-249 employees; and large
firm: over 250 employees.
Information Communication Technology
Akunyili (2010) defines ICT as an umbrella
term that covers all technical means for
processing and communicating information.
Apulu and Lathman (2006) also define ICT
as any technology that facilitates
communication and assist in capturing,
processing and transmitting information
electronically. They state further that some
community used ICTs in many developing
countries include radio, television and print
media. Ashrafi and Murtala (2008) refer to
ICT as a wide range of computerized to
chnologies which include products and
services such as desktop computers, laptops,
hand-held devices, wired or wireless internet
business productivity software such as text
editor and spread sheet enterprise software,
data storage and security network among
others.
Page 3 of 9
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 07
August 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 422
Yu (2010) considers ICT as a range of
technologies that allow the gathering
exchange of information. In order words,
ICT can be described as any tool that
facilitates communication process and
transmit information and shared knowledge
through electronic means.
SMEs Constraints in Nigeria
SMEs development is hampered by a
number a number of factors. Blili and
Raymond (1993) note that the problems
encountered by smaller firms are different
from those encountered by large firms hence
require different approach. In Nigeria, the
majority of SMEs give up their businesses
within their first five years of establishment
and a smaller percentage of these SMEs go
into extinction between the sixth and tenth
year. As a result, only about 5-10% young
SMEs survive, thrive and grow to maturity
(Onvorah, 2009).
Similarly, Adelaja (2008) comments that
SMEs have the problem of lack of
continuity whereby in most eases,
immediately the owner, proprietor or
entrepreneur dies or loses vision or
commitment, most small-scale enterprises
die. Olorunsola (2003) describes the
challenges facing Nigerian SMEs enormous
and states that this includes inadequate and
inefficient infrastructural facilitates as well
as cost of operation.
Consequently, Onuerah (2009) and Ayanda
and Laraba (2011) identify insufficient
capital as traceable to the reluctance of
banks to give out loans to Nigerian SMEs
and therefore a hindrance to their
development.
Onugu (2005) further identifies lack of
focus, inadequate market research, over- concentration on one or two markets for
finished products, lack of succession plan,
inexperience and lack of proper-book- keeping or inability to separate business and
family or personal finances, inability to
utilize/ access modern technology among
others as challenges of SMEs in Nigeria.
Additionally, the small and Medium
Enterprises Development Agency of Nigeria
(SMEDAN) has identified the problems
facing Nigeria SMEs such as low market
access to credit, poor information flow,
discriminatory legislation, poor access to
land, weak linkages among different sectors,
weak operating capabilities in terms of
skills, lack of knowledge and attitudes, lack
of infrastructural facilities etc.
Roles of ICT in Nigerian SMEs
Sajuyigbe and Alabi (2012) assert that
information communication technology can
