

































 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

Diaspora Capital and SME Development in Nigeria: Assessing 
SMEDAN’s Policy Frameworks and Institutional Role 

 
Lead Author:  

Babarinde Funto (PhD) 
Small and Medium Enterprise Development Agency of Nigeria (SMEDAN),  

Abuja, Nigeria 

 
Corresponding Author:  
Nweke-Love Henry 

Department of Political Science and International Relations,  
Landmark University, Omuaran, Nigeria 

 
 

  
 

 

 
David Samuel S. 

International University of Management,  
Windhoek, Namibia 

 
  

 
 

 
 

Abstract: 

This study examines the institutional role of the Small and Medium Enterprises 

Development Agency of Nigeria (SMEDAN) in facilitating diaspora investment into 

Nigerian SMEs. Anchored in Institutional Theory, the research interrogates how 

institutional legitimacy, visibility, and policy coherence influence diaspora–SME linkages. 

A mixed-methods approach was employed: survey data from 65 SMEs were triangulated 

with 13 key informant interviews drawn from SMEDAN officials, SME operators, and 

diaspora investors.The findings reveal that while SMEDAN demonstrates institutional 

intent through policies such as diaspora bonds, export promotion initiatives, and 

integration with the African Continental Free Trade Area (AfCFTA), its practical impact 

on diaspora investment remains limited. Only 10.8% of SMEs reported diaspora 

facilitation, and participation in diaspora-specific platforms reached just 6.2%. Qualitative 

insights further underscore a disconnect between program design and investor needs, with 

Co-Authors:
Babarinde Oluwagbohunmi

Department of Political Science and International Relations,
  Landmark University, Omuaran, Nigeria

OLAOLUWA Ayodele Michael
Programme Manager G-faise Enterprises Limited

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

diaspora respondents often bypassing SMEDAN in favor of informal networks or direct 

engagement through other agencies. 

 

The study concludes that SMEDAN’s intermediary role is constrained not by a lack of 

policy vision, but by gaps in enforcement, outreach, and institutional credibility. 

Recommendations include establishing dedicated diaspora investment desks, 

strengthening inter-agency collaboration with bodies such as NiDCOM and NIPC, and 

enhancing visibility through digital platforms. 

Keywords: SMEDAN; Diaspora Capital; Diaspora Investment; Small and Medium 
Enterprises (SMEs); Nigeria 

 

1. INTRODUCTION: 

Nigeria, the most populated nation in Africa, with an estimated 2024 GDP of $568 billion 

in real terms (World Bank, 2024), has long relied on its informal and formal sector for 

economic growth, with Small and Medium-sized Enterprises (SMEs) contributing 

significantly to its socio-economic development (Aikor, 2021; Etim & Daramola, 2020; 

Nor, 2024).According to a 2021 joint SMEDAN and NBS Survey Report, Nigeria is also 

reportedly home to over 39.6 million MSMEs, constituting 97% of businesses and 

contributing to about 48% of Nigeria’s GDP (SMEDAN & NBS, 2021). In the same vein, 

Nigeria’s SMEs made up 6.21% of gross national exports and 88% of employment 

generated within same year(PwC, 2024)..  

In a country grappling with high unemployment, poverty, and a youthful population, the 

growth of SMEs is therefore vital to attaining inclusive and sustainable economic 

development. Similarly, Nigeria’s SMEs also act as a driving force for socio-economic 

development, particularly by enhancing local production, promoting entrepreneurship, and 

promoting innovation among and women (Aikor, 2021). This is especially vital in a nation 

where informal sector economic initiatives play substantial role. Etim and Daramola 

(2020), in their comparative study of the informal sector economic activities in South 

Africa and Nigeria, assert that SMEs, particularly in the informal setting, contribute to 

economic resilience and household income generation despite structural challenges such 

limited infrastructure and inconsistent regulatory environment.  

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

The Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) was 

founded in 2003 by the SMEDAN Act with the sole aim of advancing the development of 

MSMEs sector in Nigeria (SMEDAN, 2003, 2025a). The institution was created by the 

Federal Government of Nigeria as a one-stop institution to provide support, coordinate 

empowerment, and policy direction for the development of the SMEs in recognition of the 

vital importance, played by MSMEs in national empowerment, through employment 

generation, poverty reduction, and economic diversification. Several studies acknowledge 

the positive mediating impact created by SMEDAN initiatives in entrepreneurship 

development and socio-economic growth in Nigeria (Abah &Okike, 2023; Garba & 

Ahmed, 2024; Gumel &Bardai, 2023).  

SMEDAN operates with guidance from the Federal Ministry of Industry, Trade and 

Investment with a mandate to simulate, monitor, and coordinate the development of 

MSMEs in Nigeria. In addition, the organization is shouldered with the task of 

formulating and implementing supportive policies, facilitating access to fiancé, providing 

business development services, supporting capacity-building initiatives, and creating 

market linkage for SMEs. One of the key functions of SMEDAN is to foster institutional 

support and an enabling environment that allows MSMEs to thrive, especially in the 

agricultural, manufacturing, service and trade sectors. To achieve its objectives, the agency 

has launched several initiatives such as the National MSMEs Clinics, the Conditional 

Grant Scheme (CGS) for micro-businesses, and other capacity-building and 

entrepreneurship development programs across the country (Gumel &Bardai, 2023). 

While SMEDAN has made significant strides in supporting MSMEs within Nigeria, there 

is limited documentation of its effort in diaspora engagement and local SMEs. Given the 

rising global trend of government leveraging diaspora resources for development, this area 

presents a largely untapped opportunities for SMEDAN to expand its impact (Idehen 

&Akhator, 2021). Yet, the specific contributions of SMEDAN in this domain warrant 

closer examination. This study therefore investigates SMEDAN’s role in strengthening 

SME export readiness and facilitating connections with diaspora-backed financial 

resources and trade networks. By this, thestudy seeks to illuminate how SMEDAN creates 

pathways for diaspora investment, while identifying gaps and opportunities for enhancing 

its impact. 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

 

2. BRIEF REVIEW OF LITERATURE: 

2.1 SMEDAN: Historical Background, Mandate, and Institutional Structure 

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) was 

established by the SMEDAN Act of 2003 to address the structural challenges constraining 

micro, small, and medium enterprises (MSMEs). Its creation was rooted in the recognition 

that SMEs form the backbone of national economies, particularly in developing countries, 

where they account for employment generation, grassroots development, and industrial 

linkages (SMEDAN, 2021). The agency’s mandate spans multiple objectives, including 

the promotion of SMEfriendly policies, provision of capacitybuilding programs, 

facilitation of access to finance, and delivery of business support services (Garba & 

Ahmed, 2024). It functions as a bridge between government, financial institutions, and 

entrepreneurs, ensuring that SMEs are adequately positioned to access resources and 

operate in a competitive environment.  

SMEDAN’s core functions revolve around four pillars:  

1) policy formulation and advocacy. 

2) enterprise development and training. 

3) financial intermediation and credit facilitation; and  

4) market access promotion.  

Through these, the agency has initiated programs such as the National MSME Clinics, 

Conditional Grant Schemes, entrepreneurship training, and export readiness initiatives. 

Importantly, SMEDAN works closely with the Federal Ministry of Industry, Trade and 

Investment, while also liaising with sub-national governments to implement enterprise 

support schemes (SMEDAN & NBS, 2021). 

Institutionally, SMEDAN operates with a hierarchical governance structure headed by a 

Director-General, supported by zonal and state offices. This decentralized framework is 

designed to ensure outreach across Nigeria’s six geopolitical zones. Nonetheless, 

persistent challenges such as limited funding, bureaucratic inefficiencies, and weak 

monitoring systems, often dilute the impact of SMEDAN’s interventions (Joseph, 2023). 

According to Ajuwonet al (2024), these weaknesses notwithstanding, the agency has 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

recorded progress in promoting enterprise formalization, building managerial 

competencies, and facilitating credit access through partnerships with the Bank of Industry 

(BOI), Central Bank of Nigeria (CBN), and commercial banks. 

A distinctive feature of SMEDAN’s governance is its collaborative role with diaspora-

related agencies such as the Nigerians in Diaspora Commission (NiDCOM). This inter-

agency linkage underscores its strategic function in aligning diaspora resources with SME 

development objectives. By institutional design, SMEDAN is both a policy actor and an 

implementation body, making it central to efforts aimed at mobilizing diaspora capital for 

productive investment (Douw et al., 2024). 

 

2.2 SMEs in Nigeria: Definition, Characteristics, and Contribution 

In Nigeria, SMEs are defined in accordance with the National Policy on MSMEs (2021–

2025) and SMEDAN’s classification system, which uses employment size, asset value, 

and turnover as criteria. Micro-enterprises employ fewer than ten people, small enterprises 

employ between ten and forty-nine, while medium enterprises employ up to 199, with 

asset values ranging from ₦3 million to ₦1 billion (Onyekwelu&Oyeogubalu, 2020; 

SMEDAN, 2021). 

SMEs dominate Nigeria’s economic landscape, accounting for over 96% of all registered 

businesses, contributing 46.3% to GDP, and providing more than 80% of employment 

opportunities (SMEDAN & NBS, 2021). Their role in poverty reduction, grassroots 

development, and industrial linkages underscores their centrality to national development 

strategies (Adeosun & Shittu, 2022). Beyond their domestic importance, SMEs also play a 

growing role in intra-African trade and regional integration under ECOWAS protocols 

(PwC, 2024). 

Nevertheless, Nigerian SMEs face persistent growth constraints, notably inadequate 

access to finance, poor infrastructure, multiple taxation, low digital adoption, and 

regulatory inefficiencies (Ajuwonet al., 2024; Gumel &Bardai, 2023) while informality 

remains high, limiting their scalability and ability to attract investment. Empirical 

evidence suggests that infrastructural deficits, especially erratic power supply and weak 

transport systems, significantly undermine their competitiveness (Ojiba& Olotu, 2024). 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

Skills gaps in entrepreneurship, digital technologies, and professional management further 

exacerbate the challenges (Akpuokweet al., 2024). 

Despite these constraints, opportunities abound. Scholars have emphasized that access to 

diaspora capital, improved institutional support, and digital integration can serve as critical 

success factors for Nigerian SMEs (Rodrigues, 2020). Thus, positioning SMEs within 

diaspora engagement policies presents a pathway to harness external capital, knowledge, 

and networks for sustainable growth. 

2.3. Nigerian Diaspora Profile, Remittance, Engagement, and Investment 

The Nigerian diaspora is among the most significant in Africa, estimated between two and 

fifteen million globally (Didia & Tahir, 2022). Concentrated in countries such as the 

United States, United Kingdom, Canada, and Saudi Arabia, this community has become a 

critical source of remittance inflows and social capital. In 2023, Nigeria received US$34.8 

billion in remittances, making it one of the highest recipients in Sub-Saharan Africa 

(World Bank, 2023). 

Remittances are largely directed toward household consumption, social transfers, and 

informal family businesses (Frederick & Moradeke, 2021). However, there is growing 

recognition of diaspora direct investment (DDI), which involves equity stakes, 

partnerships, and long-term business financing. Unlike remittances, DDI has 

transformative potential for SME development, but it remains underutilized due to weak 

institutional frameworks, lack of trust, and political instability (Adedeji, 2024). 

Diaspora investors are often motivated by patriotism, social impact, and economic 

opportunities (Anandene, 2024). Yet, the absence of structured platforms for engagement, 

combined with regulatory bottlenecks and poor transparency, discourages their 

participation in SME investment. Comparative studies show that while India and Ghana 

have institutionalized diaspora funds and matchmaking platforms, Nigeria’s frameworks 

are still fragmented (Douw et al., 2024). 

Beyond financial flows, diaspora engagement also brings knowledge transfer, innovation, 

and access to global markets (Gelb, 2024; Ojo, 2023). Nigerian professionals abroad 

possess expertise that can help SMEs adopt international standards and expand regionally. 

SMEDAN, working in partnership with NiDCOM, has attempted to bridge these gaps 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

through diaspora-focused initiatives such as investment summits, trade fairs, and export 

readiness programs(Joseph, 2023). 

2.4. Empirical Review of Similar Studies 

Empirical scholarship across global, regional, and Nigerian contexts provides valuable 

insights into diaspora investment and SME development. At the global level, Kumar 

(2021) applied Brinkerhoff’s Diaspora Investment Model in India and the Philippines, 

demonstrating that transparent governance and intermediary institutions enhance diaspora 

engagement. Similarly, Douw et al. (2024) compared India and Brazil, showing that 

India’s institutionalized diaspora platforms successfully attracted capital, while Brazil’s 

weak institutions limited engagement outcomes. Açıkalın (2024) also highlighted how 

institutional trust fosters diaspora entrepreneurship among Turkish expatriates, suggesting 

that strong ties with home country business councils positively influence start-ups and 

exports. 

Regionally, studies emphasize both the potential and limitations of diaspora financing in 

Africa. Lukonga (2020) and Adedeji (2024) found that Sub-Saharan African countries 

often lack intermediary agencies capable of packaging SME proposals for diaspora 

funding. Ghana has made progress by introducing diaspora bonds and structured 

investment fairs, enabling SMEs to access diaspora resources (Ayakwahet al., 2020). 

However, weak institutional coordination remains a challenge across much of the 

continent. 

In Nigeria, several studies reinforce the importance of institutional facilitation. Ojapinwa 

(2022) found a significant positive relationship between diaspora remittances and SME 

performance, while Ajuwonet al. (2024) stressed that bureaucratic bottlenecks and 

inconsistent regulations discourage diaspora participation. Gumel and Bardai (2023) 

further noted that SMEDAN’s programs, particularly in capacity building and export 

readiness, enhanced SME competitiveness and improved access to diaspora capital. 

2.5. Research Gap 

Existing scholarship has extensively examined SME challenges in Nigeria and the 

macroeconomic impact of diaspora remittances. However, few studies have systematically 

analyzed how institutional actors such as SMEDAN facilitate diaspora-linked investment 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

in SMEs. While global and regional studies (e.g., India, Ghana, Brazil) provide 

comparative insights, Nigerian research tends to focus on remittance flows or general 

SME constraints without explicitly connecting diaspora capital, institutional mechanisms, 

and SME performance. Moreover, the role of diaspora networks in overcoming regulatory 

barriers and enabling SME expansion into West African markets remains underexplored. 

This study therefore addresses a critical gap by situating SMEDAN at the center of 

diaspora-SME engagement, assessing its policy frameworks, and evaluating their 

effectiveness in mobilizing diaspora capital for SME development. 

 

3. THEORETICAL FRAMEWORK: 

This study adopts Institutional Theory as its guiding framework. Originally articulated by 

Meyer and Rowan (1977) and later expanded by DiMaggio and Powell (1983), 

institutional theory emphasizes how organizational behavior is shaped by formal rules, 

regulatory frameworks, and cultural norms. Institutions exert coercive, normative, and 

mimetic pressures, which organizations adapt to gain legitimacy and secure resources. In 

developing economies, such pressures are especially significant because institutional 

structures often determine the confidence of both domestic and foreign investors (Mamo, 

2020). 

Within the Nigerian context, SMEDAN functions as a critical institutional actor. Through 

the National Policy on MSMEs (2021–2025) and its engagement strategies with diaspora 

communities, SMEDAN creates enabling conditions for SMEs to attract foreign capital. 

Furthermore, institutional interventions such as export support programs, capacity 

building initiatives, and its diaspora investment summits, align with institutional theory’s 

emphasis on structured rules that reduce uncertainty and build legitimacy. 

This suggests that diaspora investors are more likely to commit resources when 

institutions demonstrate accountability and transparency, consistency of policy, and 

efficiency. Thus, SMEDAN’s policy frameworks can be viewed from the lens of 

institutional mechanisms that bridge diaspora capital with SME development. Institutional 

theory therefore provides a veritable platform to evaluate how SMEDAN’s governance 

structures influence diaspora confidence and investment flows into SMEs. 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

 

4. METHODOLOGY: 

4.1 Research Paradigm 

This study is “pragmatic paradigm”, emphasizing practical solutions to research questions 

by integrating both qualitative and quantitative approaches. Pragmatism recognizes the 

dynamic and socially constructed nature of reality, allowing the researcher to examine 

measurable outcomes alongside lived experiences (Creswell & Creswell, 2017; Kaushik & 

Walsh, 2019). Given the multifaceted nature of SMEDAN’s institutional role and diaspora 

engagement, this paradigm provides the flexibility needed to capture both statistical 

patterns and contextual insights. 

4.2 Research Design 

A mixed-methods case study design was adopted to explore SMEDAN’s policy 

frameworks in relation to diaspora investment. The quantitative component involved 

structured surveys administered to SMEs, focusing on access to diaspora financing, 

business growth, and export readiness. The qualitative component consisted of semi 

structured interviews with SMEDAN officials, diaspora investors, and selected SMEs. 

This design enables triangulation, ensuring that findings from one strand complement and 

validate the other (Yin, 2009; Moroi, 2021). 

4.3 Population and Sampling 

The study population consist of three (3) categories: Nigerian SMEs engaged in domestic 

and regional trade, SMEDAN officials directly involved in policy implementation in the 

agency, and diaspora investors with prior investment experience in Nigeria. For the 

quantitative phase, stratified random sampling was employed to select 60 SMEs across 

several sectors. For the qualitative phase, purposive sampling was applied to identify 

SMEDAN officials and diaspora investors with relevant expertise in SME financing and 

diaspora engagement. 

4.4 Research Instruments 

Two instruments guided data collection: a structured questionnaire and a semistructured 

interview guide. The questionnaire included both demographic items and Likert-scale 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

questions designed to capture SMEs’ experiences with diaspora-linked financing. The 

interviews provided deeper insights into institutional strategies, policy frameworks, and 

barriers to diaspora investment. 

4.5 Data Analysis 

Quantitative data were analyzed using SPSS, applying descriptive statistics such as 

frequencies, percentages, means, and standard deviations. Qualitative interviews were 

transcribed and coded thematically with NVivo, allowing the identification of recurring 

themes relating to policy frameworks, institutional challenges, and investor perceptions. 

Findings from both strands were integrated for comprehensive interpretation. 

4.6 Ethical Considerations 

Ethical approval was secured prior to data collection. Participants provided informed 

consent, anonymity and confidentiality were assured, and data collection procedures 

adhered to institutional research ethics protocols. 

 

5. RESULTS& DISCUSSION: 

Drawing on quantitative data from survey questionnaires and qualitative insights from 

interviews, the study explores SMEDAN’s institutional mechanisms, programs, and 

challenges in connecting diaspora capital, skills, and networks to Nigerian SMEs. 

5.1: Socio-demographic Characteristics of Respondents 

This section details the socio demographic profiles of both quantitative and qualitative 

respondents, providing context for interpreting the study’s findings. The quantitative 

sample consists of 65 Nigerian SMEs engaged in cross-border trade within West Africa, 

while the qualitative sample includes 13 participants: 4 SMEs with diaspora investment or 

export focus, 4 diaspora investors, and 5 SMEDAN officials. The demographic data 

illuminates the characteristics of the enterprises and individuals involved, offering insights 

into their business structures, investment patterns, and engagement with SMEDAN’s 

initiatives. 

5.1.1 Response Rate 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

The study targeted 85 participants: 70 for quantitative surveys and 15 for qualitative 

interviews. Of the 70 SMEs targeted for the survey, 65 responded, yielding a 93% 

response rate. For the qualitative component, 13 out of 15 targeted interviews were 

completed, including five SMEDAN officials, four SMEs, and four diaspora investors, 

resulting in an overall response rate of 92%. As noted by Sataloff and Vontela (2021), a 

response rate above 60% is sufficient for drawing reliable conclusions, indicating that the 

data collected are robust for analysis. 

Table 1: Response Rate 

Categories Targeted 
participants 

Response 
Frequency 

Quantitative Participants 70 65 
Qualitative Participants  15 13 
Total 85 78 
Percentage % 100 93 

Source: Primary data collected. 

The high response rate reflects the study’s effective outreach and the relevance of the 

research topic to participants. The slightly lower qualitative response rate (87%) may be 

attributed to scheduling challenges or reluctance among some diaspora investors to 

participate, a common issue in studies involving geographically dispersed respondents. 

5.1.2 Demographic Profile of Quantitative Respondents (SMEs) 

The quantitative survey targeted Nigerian SMEs involved in cross-border trade within 

West Africa, yielding 65 responses. While detailed demographic data for the full 

quantitative sample were not collected, the profile of the four SMEs interviewed (part of 

the qualitative sample but reflective of the broader SME population) provides a 

representative snapshot of the quantitative respondents, as these SMEs were selected for 

their export focus or diaspora investment engagement. 

 

 

Table 2: Demographic Information of Interviewed SMEs 

Items Categories Frequencies Percentages 
Role in the business Owner/Founder 4 100 

Manager/CEO 0 0 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

Operations/Logistics Head 0 0 
Others 0 0 

Year business was 
established 

2008 1 25 
2018 1 25 
2021 2 50 

Business size (by 
number of employees) 

1–9 (Micro) 4 100 
10–49 (Small) 0 0 
50–249 (Medium) 0 0 
250 and above (Large) 0 0 

Business's annual 
revenue 

Less than ₦5 million 0 0 
₦5 million – ₦50 million 3 75 
₦51 million – ₦100 million 0 0 
Above ₦100 million 0 0 
Prefer not to say 1 25 

Business sector Agriculture  2 50 
Manufacturing  2 50 
Food and Beverages  0 0 
Services (e.g., ICT, finance, logistics) 0 0 
Retail/wholesale  0 0 
Others  0 0 

Headquarters of 
business 

Nigeria  4 100 
Outside Nigeria 0 0 

Export to West African 
countries 

Yes  3 75 
No  0 0 
Planning to in the next 12 months 1 0 

Source: Primary data collected. 

The demographic profile of the interviewed SMEs reveals a homogenous group of micro-

enterprises, all led by owners or founders (100%), reflecting the entrepreneurial nature of 

Nigerian SMEs where ownership and management often converge. This structure suggests 

flexibility in decision-making, which could facilitate responsiveness to diaspora 

investment opportunities. The businesses vary in longevity, with 50% established in 2021, 

indicating recent entrants navigating post-COVID challenges, while older firms (2008 and 

2018) bring seasoned experience. All are micro-enterprises (1–9 employees), consistent 

with SMEDAN and NBS (2021) findings that micro-enterprises dominate Nigeria’s 

private sector. Their modest revenue (₦5–50 million for 75%) underscores financial 

constraints that may limit export readiness without institutional support. The equal split 

between agriculture and manufacturing sectors (50% each) aligns with SMEDAN’s focus 

on agro-processing and light manufacturing as key export areas. Notably, 75% of these 

SMEs actively export to West Africa, and the remaining 25% plan to do so, highlighting 

their regional trade ambitions despite their small scale. 

5.1.3 Demographic Profile of Qualitative Respondents (Diaspora Investors) 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

The qualitative sample included four diaspora investors, whose demographic 

characteristics provide insight into their investment patterns and engagement with 

SMEDAN. 

Table 3: Demographic Information of Interviewed Diaspora Investors 

Items Categories Frequencies Percentages 
Country of residence United Kingdom  1 25 

United States of America  2 50 

Ghana  1 25 

Others 0 0 

Citizens of Nigeria Yes  4 100 
No  0 0 

Area of business investment Agriculture  1 25 
Manufacturing  1 25 
Food and Beverages  1 25 
Services (e.g., ICT, finance, logistics) 0 0 
Retail/wholesale  0 0 
Others  1 (Real 

Estate) 
25 

Invested in Nigerian SMEs 
via SMEDAN 

Yes  1 25 
No  3 75 

Level of investment Less than $5,000 0 0 
$5,000–$25,000 4 100 
$25,000–$100,000 0 0 
Above $100,000 0 0 
Prefer not to say 0 0 

Source: Primary data collected. 

The diaspora investors are geographically diverse, with 50% residing in the United States, 

25% in the United Kingdom, and 25% in Ghana, reflecting key Nigerian diaspora hubs 

and the growing intra-African diaspora presence. All investors (100%) are Nigerian 

citizens, underscoring strong cultural and national ties that may drive investment 

decisions, consistent with Brinkerhoff (2008) and Douw et al. (2024). Their investments 

span agriculture, manufacturing, food and beverages, and real estate (25% each), 

indicating diverse interests but a preference for tangible, goods-based sectors, possibly due 

to perceived lower risk. Only 25% invested through SMEDAN, suggesting limited 

institutional mediation, a critical gap in SMEDAN’s outreach. The investment range 

($5,000–$25,000) is modest but significant in the Nigerian SME context, where small-

scale capital can drive substantial growth. 

5.1.4 Demographic Profile of Qualitative Respondents (SMEDAN Officials) 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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The qualitative sample included five SMEDAN officials, coded as SD1 to SD5. Specific 

demographic details (e.g., age, gender) were not collected, as the focus was on their 

professional roles and insights into SMEDAN’s programs. All officials were senior 

representatives involved in SME development, diaspora engagement, or export promotion, 

ensuring their responses reflect authoritative perspectives on the agency’s operations. 

Their inclusion provides a critical institutional viewpoint, complementing the SME and 

diaspora investor perspectives. 

The diversity of respondents having SMEs, diaspora investors, and SMEDAN officials 

offers a multi-faceted view of SMEDAN’s role in diaspora investment and SME export 

readiness. The SMEs’ micro-enterprise status and export focus align with Nigeria’s 

economic structure, while the diaspora investors’ geographic and sectoral diversity 

highlight untapped potential for broader engagement. The limited interaction with 

SMEDAN among diaspora investors signals a need for improved outreach. These profiles 

set the stage for analyzing how SMEDAN’s mechanisms influence SME-diaspora 

connections, as explored in the subsequent sections. 

5.2 Quantitative Findings 

The quantitative findings from the survey of 65 Nigerian SMEs engaged in cross-border 

trade within West Africa aims to address the study’s primary objective. The data collected 

via electronic questionnaires distributed through the SMEDAN platform, were cleaned, 

entered into Excel, and analyzed using SPSS software. Results are organized around key 

variables: SMEDAN’s role in diaspora engagement, program participation, satisfaction 

with support, and perceived effectiveness of programs. Each finding is presented with 

tables, followed by interpretations and commentary that connect the results to the 

Institutional Theory framework, which emphasizes the role of institutional structures, 

policies, and intermediaries in shaping organizational behavior and economic outcomes. 

 

5.2.1 SMEDAN’s Role in Diaspora Engagement 

The survey assessed whether SMEDAN facilitated SMEs’ engagement with diaspora 

investors, a critical measure of the agency’s intermediary function. 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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Table 4: SMEDAN’s Role in Diaspora Investment 

Has SMEDAN facilitated your business’s 

engagement with diaspora investors? 

N Frequency Percentage 

(%) 

Yes  65 7 10.8% 

No  65 57 87.7% 

Not Applicable  65 1 1.5% 

Source: Primary data collected 

The data reveal a striking disconnect, with 87.7% of SMEs reporting that SMEDAN did 

not facilitate their engagement with diaspora investors. Only 10.8% acknowledged such 

facilitation, and 1.5% found the question inapplicable. This suggests that SMEDAN’s 

institutional mechanisms for connecting SMEs with diaspora capital are either 

underutilized or insufficiently visible to the majority of respondents. 

From an Institutional Theory perspective, the low engagement rate (10.8%) indicates a gap 

in SMEDAN’s institutional legitimacy and capacity to act as an effective intermediary. 

Institutional Theory posits that organizations rely on credible institutional frameworks to 

build trust and facilitate economic exchanges (North, 1990). The overwhelming majority 

of SMEs reporting no engagement suggests that SMEDAN’s structures such as diaspora 

investment forums or matchmaking platforms are not effectively embedded in the SME 

ecosystem. This aligns with Brinkerhoff’s (2008) Diaspora Investment Model, which 

emphasizes the need for visible and trusted institutional channels to bridge diaspora 

resources with local enterprises. 

5.2.2 Participation in SMEDAN Programs 

The survey explored the specific SMEDAN programs SMEs participated in, shedding 

light on the agency’s programmatic reach and focus 

 

 

Table 5: SMEDAN programs participated in 

Item N Freq. percentage 

Diaspora engagement platforms (e.g., trade fairs, networking 

events) 

65 4 6.2% 

Capacity-building workshops/training 65 38 56.5% 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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Export promotion programs 65 21 32.3% 

Partnership facilitation with diaspora investors 65 4 6.2% 

Annual SME conferences 65 1 1.5% 

Packaging and Bray 65 1 1.5% 

Meeting fairs 65 1 1.5% 

SMEDAN training and registration 65 1 1.5% 

Other (Please specify) 65 12 18.5% 
Source: Primary data collected 

Most SMEs (58.5%) participated in capacity-building workshops and training, indicating 

that SMEDAN’s training programs are its most accessible and visible initiative. Export 

promotion programs engaged 32.3% of respondents, reflecting moderate success in 

supporting SME internationalization. However, only 6.2% participated in diaspora 

engagement platforms or partnership facilitation with diaspora investors, and other 

initiatives (e.g., annual SME conferences, packaging and branding) saw minimal 

participation (1.5% each). The 18.5% participation in unspecified “other” activities 

suggests some SMEs engaged in multiple or less formalized programs. 

Institutional Theory highlights the role of structured programs in shaping organizational 

behaviour and economic outcomes. The dominance of capacity-building programs 

(58.5%) suggests that SMEDAN has established a strong institutional presence in training, 

aligning with its mandate to enhance SME operational capacity. However, the low 

participation in diaspora-specific initiatives (6.2%) indicates a weak institutional 

framework for diaspora engagement, undermining SMEDAN’s role as an intermediary. 

This echoes Chen and Sanford’s (2024) argument that effective diaspora investment 

requires targeted institutional mechanisms, such as dedicated forums or funding windows, 

which SMEDAN appears to lack. The moderate engagement in export promotion (32.3%) 

aligns with the African Continental Free Trade Area (AfCFTA) framework, but the low 

uptake of diaspora-focused programs suggests a misalignment between SMEDAN’s 

broader SME support and its diaspora investment objectives. 

5.2.3 Satisfaction with SMEDAN’s Support for Diaspora Connections 

The survey measured SMEs’ satisfaction with SMEDAN’s support in connecting them 

with diaspora investors, providing insight into perceived institutional effectiveness. 

Table 6: Satisfaction with SMEDAN’s Support in Connecting with Diaspora Investors.  

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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How satisfied are you with the support provided by 
SMEDAN in connecting you with diaspora investors? 

N Frequency Percentage 
(%) 

Very Satisfied  65 8 12.3% 
Satisfied  65 11 16.9% 
Neutral 65 24 36.9% 
Dissatisfied  65 13 20% 
Very Dissatisfied  65 9 13.9% 

Mean 2.94 
S. D. 1.20 

Source: Primary data collected 

The mean satisfaction score of 2.94 (on a 5-point Likert scale: 1 = Very Dissatisfied, 5 = 

Very Satisfied) indicates moderate satisfaction, leaning slightly below neutral. The most 

common response was neutral (36.9%), followed by dissatisfied (20.0%) and satisfied 

(16.9%). Only 12.3% were very satisfied, while 13.9% were very dissatisfied. The 

standard deviation of 1.20 reflects a varied range of experiences among respondents. 

The neutral-to-dissatisfied sentiment (56.9% combined) underscores a perceived 

institutional shortfall in SMEDAN’s ability to connect SMEs with diaspora investors. 

Institutional Theory suggests that organizations gain legitimacy through effective service 

delivery and stakeholder trust (DiMaggio & Powell, 1983). The high proportion of neutral 

responses (36.9%) may reflect limited awareness or interaction with SMEDAN’s diaspora-

focused programs, while the dissatisfaction (33.9% combined) points to operational or 

communication gaps. This aligns with Ajuwon et al. (2024), who note that regulatory 

inconsistencies and limited institutional visibility hinder diaspora engagement in Nigeria. 

Compared to countries like Ghana, where dedicated diaspora investment desks enhance 

connectivity (Gelb et al., 2021), SMEDAN’s moderate satisfaction ratings suggest a need 

for more targeted and accessible mechanisms. 

5.2.4 Effectiveness of SMEDAN’s Programs in Supporting SMEs 

The survey evaluated the overall effectiveness of SMEDAN’s programs in supporting 

SME businesses, providing a broader perspective on the agency’s institutional impact 

Table 7:Effectiveness of SMEDAN’s programs in supporting SMEs businesses 

How would you rate the effectiveness of SMEDAN’s 
programs in supporting your business? 

N Frequency Percentage 
(%) 

Very Effective 65 22 33.9% 
Effective  65 14 21.5% 
Neutral 65 17 26.2% 
Ineffective  65 11 16.9% 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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Very Ineffective  65 1 1.5% 
Mean  3.69 
Standard Deviation 1.16 

Source: Primary data collected 

The mean effectiveness score of 3.69 indicates that SMEDAN’s programs are perceived as 

slightly more than neutral, leaning toward effective. The largest group (33.9%) rated the 

programs as very effective, followed by 26.2% neutral and 21.5% effective. Only 16.9% 

found the programs ineffective, and 1.5% rated them very ineffective. The standard 

deviation of 1.16 suggests moderate variation in perceptions. 

The relatively positive mean score (3.69) reflects SMEDAN’s institutional strengths in 

general SME support, particularly in capacity building and export promotion, as seen in 

Table 7. Institutional Theory emphasizes that effective institutions shape organizational 

outcomes through consistent and accessible programs (Scott, 2014). The 55.4% of 

respondents rating SMEDAN’s programs as effective or very effective suggests a degree 

of institutional legitimacy in broader SME development. However, the 26.2% neutral and 

18.4% negative responses indicate inconsistencies, particularly in diaspora-specific 

interventions, as evidenced by the low engagement in diaspora platforms (Table 7). This 

supports Gumel and Bardai’s (2023) observation that institutional bottlenecks, such as 

limited outreach and bureaucratic hurdles, constrain program impact. 

5.3 Qualitative Findings 

This section presents the qualitative findings derived from thematic analysis of interviews 

conducted with SMEDAN officials, Nigerian SMEs, and diaspora investors. The analysis 

addresses the study’s primary objective: to examine the institutional mechanisms and 

programs implemented by SMEDAN to attract and facilitate diaspora investment into 

Nigerian SMEs, with a focus on enhancing export readiness and regional trade within 

West Africa.  

Four key themes emerged from the data: (1) Diaspora Engagement Programs, (2) 

Institutional Support and Policy Mechanisms, (3) SMEDAN’s Role as Intermediary, and 

(4) Barriers and Operational Challenges. Each theme integrates perspectives from the 

three respondent groups, supported by direct quotations to provide authenticity and 

context. 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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5.3.1 Theme 1: Diaspora Engagement Programs 

This theme explores SMEDAN’s structured and informal programs designed to connect 

diaspora investors with Nigerian SMEs, highlighting their scope, visibility, and perceived 

effectiveness. 

Perspectives from SMEDAN officials 

SMEDAN officials described a range of programs aimed at fostering diaspora investment 

and SME development. One SMEDAN official highlighted partnerships with international 

bodies, stating.  

“SMEDAN partners with the international organization for migration in 

the skills training and empowerment of Nigerian returnees from other 

countries” (SD1) 

This initiative targets returned migrants, a subset of the diaspora, to channel their skills 

and capital into SMEs. Another official emphasized sector-specific efforts, notingthis as 

key initiatives to attract diaspora interest in high-potential sectors; 

“The Garment and textile cluster support scheme and agro-business 

development programs have been yielding great results”(SD2) 

Financial mechanisms were also cited, with some SMEDAN officials 

referencing“Diaspora bonds and the ₦100 billion impact fund under the ‘Grow Nigerian 

strategic plan” (SD2 and SD5)as tools to mobilize much needed capital. 

In addition, SMEDAN participation in regional and global exhibitions(SD3), linkage with 

global entrepreneurship network(SD4), and involvement in platforms like AGDA 

conference show active efforts to create visibility and forge diaspora connections. These 

initiatives suggest a structured approach and align with global best practices (Kumar, 

2021; Douw et al., 2024) where diaspora engagement is most successful when 

institutionalized through dedicated programs and international outreach. 

In terms of assessment of effectiveness, SMEDAN officials pointed to both quantitative 

and qualitative metrics, such as participation numbers, business leads, investment flows, 

and post-event feedback, to evaluate diaspora-focused initiatives.  SD2 noted  

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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“We asses by looking at the number of participants, business leads 

generated, investment flows, SME growth, and regular monitoring and 

reporting” 

SD5 added  

“We use quantitative data such as attendance, lead generation and 

qualitative feedback from post-survey questionnaires and interviews” 

Monitoring tools include follow-up with SMEs, surveys, and the maturity of trade 

relationships formed through fairs. This echoes Açıkalın (2024) study, which stressed the 

importance of institutional trust and consistent engagement in sustaining diaspora interest. 

Perspectives from SMEs  

From the SMEs’ perspective, several respondents reported positive experiences with 

SMEDAN’s programs, highlighting trainings, export-readiness capacity building, e-

commerce linkage, and loan facilitation. For example, SME2 shared 

“I participated in SMEDAN’s export readiness trainings and capacity-

building programmes for myself and my association (AWEP)” 

SME4 added, 

“SMEDAN facilitated NIRSAL loan of four million for me, which I have 

repaid fully. I’ve been invited to trade fairs, and currently they’re trying to 

put my products on an e-commerce platform called ‘Sell It For Me’ 

through SMEDAN SELECT” 

These accounts highlight SMEDAN’s role in enhancing SME operational and financial 

capacity and confirms literature findings such as Gumel &Bardai (2023), that emphasize 

the significance of institutional support in increasing SME readiness for investment and 

trade. 

Perspectives from diaspora investors 

On the other hand, the diaspora investors’ responses presented a mixed view, with limited 

direct engagement with SMEDAN’s programs and reflect a disconnection between 

program intent and actual reach. While DPI1noted that: 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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“SMEDAN was not directly involved in facilitating my initial investment, 

its broader ecosystem and advocacy efforts helped shape a more 

favourable investment climate” 

Others such as DPI2 and DPI3indicated that there was “no direct interaction 

withSMEDAN”DPI4 was however an exception, as was the only one who mentioned a 

direct outreach, saying,  

“SMEDAN sensitized me” 

This underlines a critical gap between program design and diaspora visibility or 

accessibility. While officials highlight robust programs, SMEs benefit primarily from 

capacity-building and loan facilitation, and diaspora investors often bypass SMEDAN, 

relying on informal networks. 

5.3.2 Theme 2: Institutional Support and Policy Mechanism  

This theme examines SMEDAN’s policy frameworks and institutional support structures 

for fostering diaspora investment and SME export readiness as well as strengthening the 

operational capacity of Nigerian SMEs.  

Perspective from SMEDAN officials 

Officials from SMEDAN highlighted various institutional policy mechanisms, including 

the establishment of enabling structures like National Diaspora Commission (NIDCOM) 

and National policy on MSMEs, both of which aims to formalize diaspora investment 

channels. In particular, SD1 noted, 

“The creation of NIDCOM and the National Policy on MSMEs have 

helped to provide a formal framework for the Nigerian diaspora 

engagement” 

In addition, a range of incentives such as diaspora bonds issuance, diaspora trust funds, 

and tax breaks were cited by SD2 and SD4 as tools for making the investment climate 

more attractive. SD2 explained  

“We implemented investment incentives like diaspora bonds, economic 

diversification policies, infrastructure development, and regulatory 

reforms.” 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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Also, SD5 emphasized, 

“Policies like the establishment of a diaspora investment fund, streamlined 

regulatory framework, and simplified registration process have created a 

more transparent business environment.” 

These strategies are in line with studies such as Williams (2020) which emphasize that 

diaspora investment flourishes where institutional trust, predictable regulations, and 

diaspora-specific financial instruments are in place. The integration of the AfCFTA 

framework into policy planning also emerged as a recurring point, especially in how it 

provides SMEs access to regional markets. SD4 stated,  

“Investment incentives and trade frameworks such as the AfCFTA have 

helped ease cross-border trade and attracted diaspora capital.” 

Perspective from SMEs 

The responses from the SMEs emphasized both opportunities and structural barriers 

within the current SMEDAN’s policy framework. Participants repeatedly identify issues 

such as lack of functional production facilities, regulatory bottlenecks with certification 

agencies, and limited access to structured support. SME1 shared, 

“Most MSMEs are yet to have functional facilities or access to contract 

manufacturing, and when they try to scale up, bottlenecks from certificate 

bodies cause setbacks. SMEDAN should intensify handholding of trained 

entrepreneurs” 

SME3 emphasized on regional opportunity, saying,  

“There’s a need to untangle the process and network SMEs through 

AfCFTA to expand our market.” 

SME2 advocated for  

“More structured B2B meetings, greater advocacy to ease business 

operations, and sustained capacity-building support to help SMEs grow.” 

These responses echo the broader institutional challenges in Nigeria noted in the literature, 

particularly in regard to weak implementation of policies, fragmented regulatory 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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oversight, and low institutional capacity to monitor diaspora investment effectively 

(Adebayo, 2021).   

Perspective from Diaspora investors 

While appreciating SMEDAN’s informational support, diaspora investors also provided 

insights into the policy environment, albeit from a more indirect perspective. DPI1 said, 

“The support I received from SMEDAN was more informational than 

financial or advisory, but it helped in understanding the regulatory 

landscape and risk environment.” 

Others like DPI3 and DPI4 appreciated SMEDAN’S educational outreach and event 

participation. DPI stated, 

“There was a recent SMEDAN webinar on customs activities and AGOA 

certification which I found informative.” 

DPI4 added,  

“They linked me to their state office and provided capacity-building 

guidance, especially in relation to AfCFTA trade processes.” 

These responses indicate that while SMEDAN’s policy may not always translate into 

direct support for every diaspora investor, they do help create a more predictably 

supportive and informed investment environment.  

5.3.3 Theme 3: SMEDAN’s Role as Intermediary 

This theme explores SMEDAN’s function as an intermediary linking diaspora investors 

with Nigerian SMEs, focusing on its programs and platforms. 

Perspective from SMEDAN officials 

All respondents including SMEDAN officials echoed that SMEDAN plays a central 

intermediary role in linking diaspora investors with Nigerian SMEs. Through multiple 

programs and platforms, the agency has created entry points for diaspora engagement, 

albert with varying levels of impact. According to SD1, SMEDAN’s partnership with 

international organization such as the international organization for migration has enabled 

it to “train and empower returnees from other countries,” while SD2 added initiatives like  

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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“The Garment and Textile Cluster Growth Support Scheme, Agro-

business engagement programs, Women-in-Self-Employment program, 

and Diaspora bonds.” 

These programs not only target SME empowerment but also seek to align diaspora capital 

with local enterprise development. SD5 emphasized more expansion efforts such as  

“The ₦100 billion impact fund and Grow Nigerian Strategic Plan 

documents, which foster international engagement at forums such as the 

AGDA conference to mobilize diaspora and global investor capital.” 

In addition, SMEDAN act as a feedback hub to evaluate engagement effectiveness. As 

SD2 explained, this includes tracking  

“The number of participants, business leads generated, investment flow, 

and SME development outcomes” 

While SD5 added 

“post-survey questionnaires and interviews for qualitative feedback.” 

These strategies aligns with the literature, which suggest that agencies often serve as 

critical intermediates in diaspora engagement by building platforms for visibility, trust, 

and transnational partnership (Gelb et al., 2021; Kumar, 2021).  

Perspectives from SMEs 

Nigerian SMEs appear to recognize this intermediary role, highlighting recurring support 

areas such as market linkage, export readiness, and trade mission facilitation. For 

example, SME1 describes SMEDAN’s role mandate as  

“Access to market linkages, trade missions, capacity building, export 

readiness, access to finance, and business matching” 

This was echoed across all SME participants with SME3 affirming that SMEDAN 

“Encourages attendance at international exhibitions and fairs” and 

provides “training on export readiness and financing.” 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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However, despite this alignment in vision, there is an underlying need for SMEDAN to 

deepen personalized support and follow-through mechanisms to make these services more 

actionable and targeted.  

Perspective from Diaspora Investors 

Diaspora investors gave mixed assignment of SMEDAN’s intermediary effectiveness. 

DRI1 acknowledge that  

“SMEDAN’s programs have made notable strides in increasing visibility for 

SMEs through trade fairs, exhibitions, and online directories,” but noted a 

gap in “more targeted matchmaking between diaspora investors and 

investment-ready SMEs.” 

Also, DPI4, however, considered SMEDAN “very effective”, particularly referencing a 

2019 event with the Nigerian Export Promotion Council where she learned about “the 

AGOA stamp process, which compelled me to restructure my business in preparation for 

export to the U.S.” In contrast, DPI2 and DPI3 were less aware of SMEDAN’s direct 

influence, though DPI3 acknowledge that 

“SMEDAN had a desk at the exhibition event, speaking for the MSME space in 

Nigeria.” 

These insights reinforce the literature that sees intermediary institutions as vital but often 

limited by scope, resources, or communication barriers (Ajuwon et al. 2024; Gumel 

&Bardai 2023). SMEDAN’s intermediary role is evident in its programs and platforms, 

but its effectiveness varies. 

5.3.4 Theme 4: Barriers and Operational Challenges 

This theme examines the structural, operational, and communication-related barriers 

hindering SMEDAN’s effectiveness in diaspora engagement. 

Perspectives from SMEDAN officials 

Despite SMEDAN’s strategic mandate, its effectiveness is undermined by significant 

structural, operational, and communication related barriers. These challenges impact its 

ability to fully harness diaspora investment potential and support SMEs in becoming 

export ready. SD1 bluntly stated that  

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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 “There are basically no strategies to harnessing diaspora potentialities to support 

local initiatives,” 

Which reveals a fundamental policy gap. This aligns with existing literature such Adedeji 

(2024) as that identifies weak institutional framework as a major constraint in diaspora 

engagement for development. In addition, financial constraints also limit SMEDAN’s 

outreach and operational efficiency. SD2 noted  

“Inadequate funding, lack of enlightenment and campaign,” 

Which are being addressed through “collaboration with stakeholders, advocacy for 

increased funding, and developing strategies.” 

Likewise, SD4 emphasized that  

“The agency has partnered with international and local funding bodies to 

facilitate diaspora investment,” 

Highlighting ongoing attempts to bridge financial and operational gaps. SD3 pointed to a 

trust and integrity issue within the system, referencing “insincerity as it regards 

overestimation of production capacity in deal rooms,” which the agency addresses through 

“capacity building, sanitization, and training.” These statements support the finding that 

institutional credibility and transparency are crucial for diaspora confidence. 

Perspective from SMEs 

From the SME perspective, the bottlenecks in certification and operational scaling are 

major hinderances. SME1 noted 

“Most MSMEs are yet to have established functional facilities... when they want to 

scale up, the bottlenecks from certification bodies bring setbacks.” 

The same concern was echoed by SME4, who reiterated that  

“People just start business from their homes in a small scale,” 

And the inability to meet regulatory standards hampers export readiness. This reflects 

earlier literature that emphasizes capacity deficits and informality as major barriers to 

SME growth and export engagement in West Africa (Adedeji, 2024) 

In addition, SME2 suggested  

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

“More structured B2B meetings, more advocacy... and handholding activities” 

To help grow sustainability. Also, SME3 urged SMEDAN to “untangle the process” of 

cross-border engagement under AfCFTA, a comment highlighting procedural and 

regulatory complexity as key issues. 

Perspective from Diaspora Investors  

Diaspora investors echoed their frustration, particularly concerning visibility and 

connectivity with investment-ready businesses. DPI1 acknowledged that while SMEDAN 

has improved visibility “trade fairs, exhibitions, and online directories,” there is still a lack 

of “targeted matchmaking between diaspora investors and SMEs that are investment 

ready.”  

DPI3 observed that SMEDAN’S presence is often passive, stating  

“SMEDAN had a desk speaking for the MSME space,” 

But the real engagement came through the Ministry of Trae and Investment. In contrast, 

DPI2 admitted 

“I wasn’t aware of SMEDAN until this survey,” 

Indicating a significant communication and outreach gap. However, DPI4 provided a 

more positive assessment, noting that a government-led export even led them to  

“Restructure [my] business... because the amount of information required 

to get the AGOA stamp meant my business couldn’t continue in an 

unstructured manner.” 

This underscores how targeted information and compliance requirement can catalyse 

serious business reform among diaspora-linked entrepreneurs. 

 

 

5.4 Discussion of Findings 

By triangulating survey responses from 65 SMEs, interviews with SMEDAN officials, 

SMEs, and diaspora investors, alongside the reviewed literature, this analysis highlights 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

SMEDAN’s strengths, gaps, and opportunities in linking diaspora resources to SME 

growth. The evidence points to strong institutional intent but weak engagement structures. 

5.4.1 Institutional Mechanisms and Diaspora Engagement 

Only 10.8% of SMEs reported diaspora facilitation (Table 4), with just 6.2% engaged in 

diaspora-specific platforms (Table 5). Diaspora investors (e.g., DPI2, DPI3) confirmed 

limited awareness, while officials cited programs like the ₦100 billion impact fund and 

IOM partnerships. Institutional Theory emphasizes legitimacy and visibility (DiMaggio & 

Powell, 1983), both of which remain weak. Although programs exist, uptake is minimal 

because outreach and communication are poor. This reflects Brinkerhoff’s (2008) 

observation that credible, accessible platforms are essential. Unlike India’s dedicated 

diaspora desks (Gelb et al., 2021), SMEDAN’s channels remain underutilized. 

5.4.2 Program Effectiveness and SME Support 

Survey data show strong participation in training (58.5%) and export promotion (32.3%), 

with moderate effectiveness (mean 3.69, Table 7). SMEs shared positive experiences, such 

as loans facilitated by SMEDAN or support for trade fairs. However, diaspora-related 

initiatives remain marginal, with satisfaction averaging only 2.94 (Table 6). High 

neutrality (36.9%) indicates limited exposure. Diaspora investors described SMEDAN’s 

role as “more informational than financial,” highlighting a mismatch between SME needs 

and investor expectations. While Ghana has dedicated diaspora units (Gelb et al., 2021), 

SMEDAN remains more effective in training than in investment facilitation. 

5.4.3 Policy Frameworks and Institutional Support 

SMEDAN’s policies such as diaspora bonds, MSME frameworks, and AfCFTA 

integration, reflect institutional intent. Officials cited measures such as a diaspora 

investment fund and streamlined regulations (SD5), echoing Williams (2020) on the value 

of clear policy. Yet SMEs and diaspora investors reported bureaucratic barriers and limited 

operationalization. Engagement remains low (10.8%), with modest investment levels 

($5,000–$25,000, Table 3). This gap reflects North’s (1990) view that enforcement and 

trust are as crucial as policy design. Compared with India’s diaspora bonds (Kumar, 2021), 

Nigeria’s frameworks lack sufficient credibility to attract larger investments. 

5.4.4 Barriers and Operational Challenges 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

Both datasets highlight structural weaknesses. Participation in diaspora programs is 

negligible (6.2%), with one-third of SMEs dissatisfied (Table 4.6). Officials acknowledged 

inadequate funding and weak strategies (SD1, SD2), while SMEs pointed to informality 

and export bottlenecks. Diaspora investors stressed fragmented institutional roles, often 

bypassing SMEDAN for the Ministry of Trade. These challenges echo Gumel and Bardai 

(2023) on institutional bottlenecks and Brinkerhoff (2008) on the centrality of trust. 

Ghana’s proactive diaspora outreach (Gelb et al., 2021) contrasts with SMEDAN’s limited 

visibility, as DPI2 admitted, “I wasn’t aware of SMEDAN until this survey.” 

5.4.5 Triangulation and Implications 

The findings show SMEDAN’s capacity-building strength but weak diaspora-specific 

interventions. Low engagement (10.8%), limited uptake (6.2%), and modest satisfaction 

(2.94 mean) undermine its intermediary role. Yet targeted interventions, such as AGOA-

linked certification (DPI4), show potential. Literature confirms these weaknesses: Ajuwon 

et al. (2024) and Adebayo (2021) point to regulatory inconsistencies and weak 

implementation. While SMEs recognize SMEDAN’s contributions in market linkages, 

diaspora investors largely perceive its absence, reinforcing the need for dedicated diaspora 

platforms. 

5.4.6 Broader Implications 

The study underscores the need for SMEDAN to strengthen its intermediary role. 

Dedicated diaspora desks, co-investment forums, and digital platforms could align SMEs 

with investors. Collaboration with NIDCOM and NIPC is vital to address funding and 

regulatory challenges. Enhanced outreach, particularly to diaspora hubs in the UK and US, 

could boost visibility. Finally, linking programs to AfCFTA opportunities would support 

export readiness, positioning Nigeria more competitively in regional trade. 

 

6. CONCLUSION, RECOMMENDATIONS, AND CONTRIBUTIONS TO 

KNOWLEDGE 

6.1 Conclusion 

This study examined SMEDAN’s mechanisms for attracting diaspora investment into 

SMEs. Results show that while training (58.5%) and export programs (32.3%) engage 

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 IJO- INTERNATIONAL JOURNAL OF SOCIAL SCIENCE AND HUMANITIES RESEARCH  
( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

https://ijojournals.com/                                       Volume 08 || Issue 08 || August, 2025 || 

“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

many SMEs, diaspora-focused initiatives reach only 6.2%, with 10.8% reporting 

facilitated connections. Officials highlighted structured policies, yet diaspora investors 

revealed low awareness. From an Institutional Theory perspective, SMEDAN’s efforts 

lack legitimacy and visibility, limiting their effectiveness despite credible program 

frameworks. 

6.2 Recommendations and Policy Implications 

First, SMEDAN should establish diaspora investment desks, modelled on Ghana’s 

approach (Gelb et al., 2021), to connect SMEs with investors. Second, digital outreach in 

diaspora hubs could counter poor visibility. Third, collaboration with NIDCOM and NIPC 

would help address funding shortages and streamline processes, while regulatory reforms 

could ease bottlenecks that hinder export readiness. Finally, aligning with AfCFTA 

opportunities would enhance SME competitiveness and regional integration. 

6.3 Contributions to Knowledge 

This research extends literature on diaspora investment by focusing on SMEDAN’s 

intermediary role. It demonstrates that institutional visibility and legitimacy shape 

diaspora-SME interactions, confirming Brinkerhoff’s (2008) and Scott’s (2014) 

frameworks. Unlike previous studies on SME support (Ajuwon et al., 2024), it shows 

diaspora-specific mechanisms are underutilized, despite structured programs. It also 

highlights the role of micro-enterprises in AfCFTA markets, offering a foundation for 

future inquiry into institutional strategies for diaspora engagement. 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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“Diaspora Capital and SME Development in Nigeria: Assessing SMEDAN’s Policy Frameworks and Institutional Role" 

 

 

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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( ISSN 2811-2466 )                                                                                                          Nweke-Love Henry1*  

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