Journal of Economics, Management and Trade

Micro and small-scale enterprises (MSEs) are very vital for economic growth and development. Despite their importance, they still contend with myriad of environmental factors (internal and external) which negatively affect their performance. This paper examines the relationship between environmental factors and the performance of MSEs focusing on two commercial towns (Ikare and Ugbe Akoko) in Akoko North East local government of Ondo State, Nigeria. Data were gathered through a structured questionnaire and analysed using descriptive statistics and Spearman Product-Moment Correlations. A purposive sampling technique was employed and a sample of 204 owners/managers of MSEs was surveyed.  The findings revealed that environmental factors (inadequate finance, inadequate infrastructure and poor managerial skills) have a significant                    (p =.05) and negative relationship with MSEs performance (profit, revenue and employees). The findings imply that majority of MSEs are chronically underfinanced as a result of funding inaccessibility. Owners/managers of MSEs do not possess the requisite managerial skills because of the ignorance of training benefits. Lastly, inadequate infrastructure affects MSEs performance minimally because of substitute like generators, sachet water, etc.