Impact of Access to Credit, Credit Delivery, and Variation in Interest Rate on Business Performance: An Empirical Study of SMEs in Kwara, Nigeria

Despite the importance and contribution of entrepreneurship to the national economy, challenges still remain with regard to its sustainability and growth, since small- and medium-scale enterprises (SMEs) need financial help to handle the challenging issues of survival and expansion. Therefore, the p...

Full description

Saved in:
Bibliographic Details
Published in:The international journal of interdisciplinary organizational studies 2024-01, Vol.19 (2), p.57
Main Authors: Muhammad Bashir Owolabi Yusuf, Lawal, Azeez Tunbosun, Nur Farhah Binti Mahadi, Akande, Olawale Samuel, Victoria Ayoola Ademilua, Kabir, Adebayo Shola, Amos, Isaac
Format: Article
Language:English
Subjects:
Access to credit
Central banks
Economic growth
Entrepreneurship
Interest rates
Loans
Microfinance
Small & medium sized enterprises-SME
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Despite the importance and contribution of entrepreneurship to the national economy, challenges still remain with regard to its sustainability and growth, since small- and medium-scale enterprises (SMEs) need financial help to handle the challenging issues of survival and expansion. Therefore, the purpose of this study is to examine the effects of credit delivery, credit availability, and interest rate fluctuations on the performance of SMEs in Nigeria. The data used for the analysis was gathered from a survey of SMEs in Kwara State, Nigeria. The data was analyzed using the Partial Least Square of Structural Equation Modeling (PLS-SEM). The results of the analysis provided support for the idea that the main challenge facing SMEs in Nigeria is a financial issue that has a negative impact on their ability to expand. Similar to this, for SMEs to operate successfully, strong financial backing is required. In fact, the entire microfinance bank concepts used in this study demonstrated that they contribute significantly to the success of SMEs in the local area of Kwara State, Nigeria. Therefore, it is recommended that microfinance institutions develop a mechanism for delivering loans that is accommodating to SMEs. The Central Bank of Nigeria should put into effect policies that boost cash flow and direct it to SMEs in industries with a higher tendency to spur economic growth. In order to support them and improve their company operations, microfinance institutions should also charge minimal or no interest on loans for small and medium-sized businesses.
ISSN:2324-7649
2324-7657
DOI:10.18848/2324-7649/CGP/v19i02/57-82