Global Journal of Economic and Finance Research

This study empirically assesses the effect of capital structure on the financial sustainability of micro, small and medium-scale enterprises (MSMEs) in Northeastern Nigeria. Using the fixed effects method, the research analysed panel data of 174 MSMEs across the six (6) states from 2018-2023. Further evidence was provided using the random effect technique. The finding shows that short-term debt negatively influences financial sustainability, while long-term debt financing may lead to sustainable performance. The result implies that MSMEs should prioritise securing long-term borrowing to enhance their performance and attain financial sustainability. Policymakers and regulators should not relent in providing long-term financing opportunities to MSMEs for consistent growth.

Capital structure, financial sustainability, North Eastern Nigeria, sustainable growth.

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