The issue of insecurity is not new in Nigeria, since February, 2010 the nation has been witnessing unparalleled security challenges (Adeleke, 2013). The endemic problems of insecurity is attributable to current mass unemployment and poverty confronting the country especially the North East Zone, which has led to the closure of many businesses across the Northern Nigeria. This study therefore examined the effect of insecurity on the performance of small and medium scale enterprises in North-Eastern Nigeria. The study adopted a quantitative research method. Primary data were collected from the sampled owners of SMEs to observe the effect of insecurity on the performance of SMEs in North Eastern Nigeria.
Structured questionnaire was used to collect primary data. Questionnaires were administered to 321 sampled respondents, with the help of research assistants to the owners of sampled SMEs within the six states of the North Eastern Nigeria. Out of 321 administered questionnaires, 315 were correctly filled and returned. With an overall average score of 4.83 and a cumulative total of 67.68 out of a possible 70, there is significant and widespread agreement that insecurity in the North-East poses a critical threat to SMEs. As shown in Table 3, the average item score of 4.11 and a total score of 20.55 out of 25 reinforce the conclusion that insecurity adversely affects the financial health of SMEs. This consistent and strong
perception indicates that insecurity acts as a barrier to profitability, resulting in increased operational costs, decreased sales, and sustained financial losses for many businesses.