Causes of Late Payment of Commercial Debt and Challenges of Working Capital to Small and Medium Enterprises (SMES) in the Construction Industry of Zamfara State, Nigeria

Authors : Basiru Muazu Namaiwa; Kaura –Namoda

Volume/Issue : Volume 7 - 2022, Issue 1 - January

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One of the most significant current discussions in the construction industry is the issue of late payment of commercial debt to the contractors. Late payment of debts has been a very serious problem in the construction industry of both developed and developing countries. This research investigated late payment of commercial debt and challenges of working capital to small and medium enterprises (SMEs) in the construction industry of Zamfara state (Nigeria). The research was carried out through the use of structured quantitative questionnaire survey administered within the stakeholders in the construction industry of the study area. The data obtained was analysed using SPSS software through the frequency, percentage, mean, standard deviation and ranking tools. It was discovered that there is an evidence of the existence of late payment of commercial debt to SMEs in the construction industry of Zamfara state, Nigeria, because clients don’t pay contractors as at when due. Poor management and financial base of the clients has been identified as the leading factor causing late payment of commercial debt in the Nigerian construction industry. It was also discovered that lack of access to bank loans, overdraft and other facilities is the most severe challenge of working capital management with the small and medium enterprises (SMEs) in the construction industry of zamfara state. This research have recommended among others that contractors should study and understand the financial base and management of their clients before engaging into any contract with them to avert the likelihood of late payment of monies due to them. The three tiers of government should initiate a supporting scheme that will enable the SMEs to access low income loans so as to contribute maximally to the economic growth of Nigeria.

Keywords : Commercial Debt, Construction Industry, Late Payment, Small and Medium Enterprises (SMEs), Working Capital.


Paper Submission Last Date
30 - June - 2023

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