Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between working capital management and customer satisfaction in the banking sector has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Selected Small and Medium Enterprises in Nigeria where operating conditions differ markedly from more developed markets.

Selected Small and Medium Enterprises in Nigeria presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

While working capital management is widely discussed in policy and industry circles, empirical evidence on its actual effect on customer satisfaction in the banking sector within Selected Small and Medium Enterprises in Nigeria remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to working capital management are helping or hindering customer satisfaction in the banking sector — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Working Capital Management on customer satisfaction in the banking sector in Selected Small and Medium Enterprises in Nigeria.
2. To assess the extent to which working capital management influences customer satisfaction in the banking sector within the study area.
3. To identify the challenges associated with working capital management in relation to customer satisfaction in the banking sector.
4. To recommend strategies for optimizing working capital management in order to improve customer satisfaction in the banking sector.

1.4 Research Questions

1. What is the effect of working capital management on customer satisfaction in the banking sector in Selected Small and Medium Enterprises in Nigeria?
2. To what extent does working capital management influence customer satisfaction in the banking sector within the study area?
3. What challenges are associated with working capital management in relation to customer satisfaction in the banking sector?
4. What strategies can be adopted to optimize working capital management in order to improve customer satisfaction in the banking sector?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around customer satisfaction in the banking sector. For managers and practitioners within Selected Small and Medium Enterprises in Nigeria, the study provides practical insight into how working capital management can be better managed. Finally, it contributes to the academic literature on finance / banking by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

The study is limited to an examination of Working Capital Management and its relationship with customer satisfaction in the banking sector within the context of Selected Small and Medium Enterprises in Nigeria. It reflects a BSc-level scope of analysis and relies on data and perspectives available within that scope; generalizing the findings beyond this specific context should therefore be done with appropriate caution.