Loan Characteristics, Loan Repayment and Performance of Small and Medium Enterprises in Kano Metropolitan: A Mediating Model

Small and Medium Enterprises contributes to the development of both developed and developing Nations. This contribution depends on the performance of Small and Medium Enterprises. In Nigeria, there are many credit facilities provided by financial institutions for Small and Medium Enterprises; the fa...

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Bibliographic Details
Published in:Journal of finance, accounting, and management accounting, and management, 2019-01, Vol.10 (1), p.43-56
Main Authors: Muhammad, Ibrahim Bala, Bambale, Abdu Ja'afaru, Ibrahim, Murtala Aminu, Sulaiman, Sulaiman Abdulwahab
Format: Article
Language:English
Subjects:
Chi-square test
Collateral
Economic models
Economics
Entrepreneurs
Financial institutions
Loans
Microfinance
Payback periods
Regression analysis
Small & medium sized enterprises-SME
Social sciences
Stockholders
Tenure
Variables
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Summary:Small and Medium Enterprises contributes to the development of both developed and developing Nations. This contribution depends on the performance of Small and Medium Enterprises. In Nigeria, there are many credit facilities provided by financial institutions for Small and Medium Enterprises; the facilities are meant to promote Small and Medium Enterprises' activities. Most of these credit facilities are granted to Small and Medium Enterprises without collateral, as such, some Small and Medium Enterprises default in repayment of the loan facilities. Therefore, this study examines Loan Characteristics, Loan Repayment and Performance of small and medium enterprises in Kano city: A mediating model. Loan characteristics was proxied by loan size and loan tenure. Data were collected from 108 respondents through structured questionnaire and a simple random sampling technique was applied. The data were analyzed using correlation and multiple regression analysis. The study revealed that loan size and loan tenure have Positive significant relationship with loan repayment. The study further revealed that, Small and Medium Enterprises performance partially mediate the relationship between loan size, loan tenure and loan repayment. Therefore, the study recommends that an average loan size and loan tenure should be maintain when granting loan and where adjustment becomes necessary, the financial institution should set loan size and loan tenure based on cash pattern (income) of the borrower in order to increase loan repayment performance of the Small and Medium Enterprises.
ISSN:2153-2818
2153-2826