Year: 2026
Type: article
Abstract: Bank credit plays a major role in the development of any economy. Small and Medium Scale Enterprises (SMEs), being an engine that propel the growth of the economy, need this credit for capital accumulation which in turn be used to promotes performance and economic growth. The main objective of this study is to examine the effect of bank’s credit on the performance of small and medium scale enterprises in Nigeria. Specifically, to determine the effect of bank credit, lending rate and savings and time deposits on the performance of SMEs. The study employed secondary data obtained from the Central Bank of Nigeria’s Statistical Bulletins for a period of thirty-two years (1992-2023). The data obtained were subjected to fully modified least square regression analysis. Finding reveal that banking sector credit and saving and time deposits with Deposit Money Banks (DBMs) have a positive and significant effects on SMEs performance at 5% significance level (with pv of 0.005 and 0.00548, respectively). However, lending rate and exchange rate have a negative and significant effect on SMEs performance at 5% significance level (with pv of 0.0562 and 0.020). Based on the findings, the study concludes that DBMs credits have significant effect on SMEs performance in Nigeria. Therefore, DMBs should be encouraged to make available small and medium scale term loan to SMEs and ensure consistent monitoring of credit is adopted, as this would resolve the problem of loan diversification and contribute significantly to SMEs performance.
Author: James Aranisola Ishola
Institution: Thomas Adewumi University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7208749020