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Nexus between Loanable Funds and Performance of Small and Medium Scale Enterprises in Nigeria: Empirical Evidence

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  • Gbalam Peter Eze (Ph.D)

    (Banking & Finance Department, Faculty of Management Sciences, Niger Delta University Wilberforce Island, Bayelsa State, Nigeria)

  • Tonye Richard Apiri

    (Banking & Finance Department, Faculty of Management Sciences, Niger Delta University Wilberforce Island, Bayelsa State, Nigeria)

Abstract

Industrial and economic developments are flourished by small and medium scale enterprises (SMEs) in a country through efficient utilization of local resources, production of intermediate goods and services and transformation of rural technology. This study empirically examined Nigerian context of loanable funds impact on performance of small and medium scale enterprises (SMEs)within a study range of 2001-2018. The study employed time series data sourced from Central Bank of Nigeria (CBN) annual statistical bulletin, 2018. The error correction mechanism (ECM) was used to analyze data set after determining their individual stationarity with the presence of long-run cointegrating relationship among variables employed in the study. The study found that, credit to the private sector and interest rate ceiling have both linear and non-linear significant impact on the performance of small and medium scale enterprises (SMEs) in Nigeria. Therefore, the study recommends: Government and financial institutions in Nigeria to continue to encourageand create a centralized entity within their operations as a strategy of governance to offer short and medium term loans to small and medium scale enterprises either monthly, quarterly or annually as to enable them consistently stay afloat in their business operations.

Suggested Citation

  • Gbalam Peter Eze (Ph.D) & Tonye Richard Apiri, 2020. "Nexus between Loanable Funds and Performance of Small and Medium Scale Enterprises in Nigeria: Empirical Evidence," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 7(3), pages 170-182, March.
    • Handle: RePEc:bjc:journl:v:7:y:2020:i:3:p:170-182
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    References listed on IDEAS

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    1. Keasey, K & McGuinness, P & Short, H, 1992. "New Issues on the U.K. Unlisted Securities Market: The Ability of Entrepreneurs to Signal Firm Value," Small Business Economics, Springer, vol. 4(1), pages 15-27, March.
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