Effect Of Banditry On The Performance Of Small And Medium Enterprises In North Central Nigeria

Abstract

Small and Medium Enterprises (SMEs) constitute the backbone of Nigeria’s economy, contributing significantly to employment, innovation, and gross domestic product. Despite their importance, SMEs in North Central Nigeria face persistent challenges from rising insecurity, particularly the surge of banditry involving armed robbery, kidnapping, and property destruction. This study investigates the effect of banditry on the operational performance, financial outcomes, and investment decisions of SMEs in the region. A descriptive survey research design was employed, and data were collected from 400 SME operators across Benue, Nasarawa, and Niger States using structured questionnaires. Findings reveal that banditry has a significant adverse effect on SME operations, leading to reduced working hours, staff absenteeism, transportation barriers, and supply chain disruptions. Financial performance indicators, including sales growth, gross margins, and net profit margins, declined sharply after banditry incidents, while operational efficiency and labor productivity dropped considerably. Statistical analysis confirmed that banditry frequency negatively and significantly impacts SME financial performance. The study concludes that persistent insecurity undermines the resilience and sustainability of SMEs in North Central Nigeria, threatening regional development and national economic growth. It recommends strengthening security infrastructure, providing financial risk mitigation mechanisms, promoting digital transformation, and integrating SME protection into security and economic policies to enhance resilience and sustainable recovery.