Role of Financial Institutions in Developing Small-scale Enterprises

This research work analyses the role of financial institutions in developing small-scale enterprises (SMEs) with a particular reference to the impact of Deposit Money Banks (DMBs) credit funding on the performance of SMEs. The study employed one independent variable (DMBs credit funding) and two dependent variables (productivity and profitability of SMEs) with a sample of twenty (20) SMEs financed by Fidelity Bank Plc during the Year 2015. Secondary data from the Central Bank of Nigeria statistical database and SMEs record were used in the study. The data was run using SPSS 16.0. The result of the study showed that DMBs credit funding positively impacted the productivity and profitability of SMEs in Nigeria. It is therefore recommended that DMBs charge low interest to encourage small-scale enterprises. The study also recommends that the Government make more policies that will compel DMBs and other financial institutions to increase credit access to SMEs to enable them to invest in capital equipment to increase productivity and profitability in the future.

Autorentext

Saratu Yakubu Haruna is a lecturer with more than a decade of experience. She holds an M.Sc. in Accounting.Mr. Musa Muhammad Dandikko, CPA, is an experienced career civil servant who reads a lot of literature. His quest for learning kick-started his interest in writing in a both academic and fiction books.