A Critical Review of SMES Access to Credit and Their Performance/Growth in Nigeria

Authors : Gbenga I . Olorunsola; Nwankwo, Alexius Ndudi

Volume/Issue : Volume 8 - 2023, Issue 3 - March

Google Scholar : https://bit.ly/3TmGbDi

Scribd : https://bit.ly/3FSCKPi

DOI : https://doi.org/10.5281/zenodo.7771010

In one of their publications, the Development Finance Department of the CBN noted that Small and Medium-Sized Enterprises (SMEs) are essential to any nation's economic growth. It has been discovered that small and medium-sized businesses (SMEs) have tremendous potential for employment generation, technological advancement, output diversification, the nation’s entrepreneurship development, forward growth, and eventual integration into large-scale industries. The increasing significance of small and medium-sized enterprises (SMEs) and the contributions they make to the nation's economic development necessitate that they receive the necessary assistance and resources, particularly access to financial resources, in order to increase their economic contribution; However, for a variety of reasons, including assumptions and facts, this has not been the case. Financial intermediaries are the most unprepared stakeholders in the provision of the necessary finance for bridging the gap between the SME's financial needs and available funds. Despite the potential that SMEs have demonstrated, they still do not feel comfortable considering them top in loan/credit allocation and pricing. Access to lending or other external sources of financing is one of the factors that determines the growth, survival, and development of a business, including small and medium enterprises, according to previous and recent research. This is especially true for small and medium-sized businesses, which face a number of obstacles when trying to get credit financing from banks and other financial institutions. Some of these obstacles are said to be caused by banks and financial institutions not having enough information to evaluate the credit opportunity. This paper examines the performance and growth of Nigerian SMEs as well as their access to credit. The findings and conclusion showed that the performance and growth of small and medium-sized enterprises (SMEs) in Nigeria are influenced by their access to credit; however, SMEs in Nigeria have less access to credit than large corporations. Despite the difficulties and setbacks that SMEs face, they have always demonstrated the potential for greater performance, growth, and retention of their position as a significant contributor to the country's GDP if they have access to the necessary credit.


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