ACCESSIBILITY OF CREDIT FACILITY FROM FINANCIAL INSTITUTIONS BY SMALL AND MEDIUM SCALE ENTERPRISES: EVIDENCE FROM NIGERIA

This study tries to look at the accessibility of credit facility from financial institutions by
small and Medium Scale Enterprises: Evidence from Nigeria. Small and Medium Scale
Enterprises have been faced with poor funding when developing nations like ours are
considered. This however distorts the outstanding function of SMEs as the engine and
pivot for the economic growth and national development. No wonder Nigeria has
continued to experience high level of emergence of new enterprises that would only exist
for two to three years and fizzle out. This study has a broad objective of determining the
degree of accessibility of credit facility by SMEs from the financial institution in Nigeria
with such variables like government policies, collaterals, tax incentives etc. The study
adopted the analytical survey method to gather information on the variables. The
population was made up of all the financial controllers in the 360 manufacturing
enterprises in the three states under study. We in turn used judgmental sampling technique
to select the financial controllers in these manufacturing enterprises. Data were collected
by means of questionnaires with response option graduated into a five- likert scale
designed to capture information on the variables that affect SMEs. The linear regression
analysis was used to test hypotheses one, three and four. One sampled t-test was used to
test hypothesis two while a multiple regression analysis was used to test the multiple
effects of three independent variables on credit accessibility. The result obtained using the
test statistics shows a positive relationship between government policies, access to credit
as the greatest problems facing SMEs, tax incentives, availability of collaterals as regards
the accessibility of credit facility by SMEs. The research questions proved that
international financial assistance abounds for SMEs. The study also showed that the level
of the operation of SMEs has not improved when compared with other developed nations.
SMEs in Nigeria are faced with numerous challenges and such has affected their
performances. We therefore recommend that attention and support be given to the subsector
so as to enhance their performance as the engine of growth and catalyst for socioeconomic
transformation in Nigeria. The study has provided opportunities for further
research into other factors that could affect SMEs credit accessibility, in order to ascertain
if such factors actually affect them in equal measures or not.