Deposit money bank credit to small and medium enterprises, socio-economic performance and economic growth in Nigeria

Owolabi, Oluwarotimi Ayokunnu and Nasiru, Adamu (2017) Deposit money bank credit to small and medium enterprises, socio-economic performance and economic growth in Nigeria. International Journal of Development and Sustainability , 6 (10). pp. 1218-1485. ISSN 2186-8662

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Abstract

Small and Medium Enterprises (SMEs) have popularly been argued to contribute positively to economic growth of countries of the world through their positive effect on socio-economic development of the countries. However SME access to credit remains essential for SMEs continued positive contribution. In the case of Nigeria, unemployment and poverty are two major socio-economic performance indicators in which she has performed poorly over the years, despite efforts by the Nigeria government to boost credit availability to SMEs. In that light, this study explores, the relationship between SME credit and each of Unemployment and poverty respectively, using Pearson’s correlation, and further examines the impact of Deposit money bank credit to SMEs on economic growth in Nigeria using Ordinary least squares regression. Data employed for this study was annual data from 1992 to 2015 obtained from the Central Bank of Nigeria Statistical Bulletin. The Pearson’s correlation revealed a negative but insignificant relationship between SME credit and Unemployment, and a negative and highly statistically significant relationship between SME credit and poverty. The results of Ordinary Least Squares regression revealed that SME credit has a negative and highly statistically significant impact on economic growth in Nigeria. Based on the results of the study it is recommended that the Nigeria government should support SMEs with necessary training in risk management so as to increase SME capability to effectively manage the risk of their operations, the Nigeria government should increase provision of infrastructural facilities in order to reduce the operating costs of SMEs, and Nigeria deposit money banks should be equipped with necessary technology to effectively assess the creditworthiness of SMEs in applying for loans, amongst other recommendations.

Item Type:	Article
Uncontrolled Keywords:	Small and Medium Enterprises; Unemployment; Poverty; Economic Growth; Deposit Money; Bank Credit
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
Divisions:	Faculty of Law, Arts and Social Sciences > School of Management
Depositing User:	Mrs. Julie Ilogho
Date Deposited:	26 Dec 2017 11:18
Last Modified:	26 Dec 2017 11:18
URI:	http://eprints.covenantuniversity.edu.ng/id/eprint/9822

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