Abstract

This study examines the factors affecting the performance of Micro, Small, and Medium Enterprises (MSMEs) in the textile sector in Benin metropolis, the objectives are to determine how the availability of operating capital affect the performance of MSMEs in the textile sector in Benin metropolis as well as to ascertain how entrepreneurial skills, multiple levies and cluster location affects the performance of MSMEs in the textile sector in Benin metropolis. This research population of study is drawn from the two major textile markets in Benin metropolis. A sample size of 136 textile MSMEs owners were selected randomly from the major textile markets in Benin metropolis. Data was collected through questionnaire and were analysed using descriptive statistics. The findings showed that several factors significantly impact the performance of MSMEs operating in the textile market in Benin metropolis. Firstly, maintaining operating capital is a challenge, addressing customer needs effectively has proven to be a key driver of increased profitability for businesses in this sector. Furthermore, the burden of dealing with diverse multiple levies negatively affects operational efficiency, leading to financial strain with little or no effect on customer patronage. Additionally, the proximity to similar businesses in market clusters can attract customers and provide networking opportunities, yet it may also limit a business's ability to differentiate itself and stand out from competitors. It is recommended that banks, financial institutions and government should earmark substantial amount as low-interest loans for MSMEs in the textile sub-sector and provide lands and other infrastructure for cluster location in the textile sub-sector. The federal government should ban the importation of textiles to the country, as it will ultimately drive many young graduates into the sector and promote innovation and creativity in the sub-sector. It was also recommended that government at all levels must work together to reduce the burden of multiple taxes and collaborate with other institutions to regularly conduct training and seminars for these MSME to enhance their entrepreneurial skills.