Credit access and the performance of non-farm household enterprises: evidence from Nigerian data

Inadequate availability of credit access is one of the major problems facing household enterprises in developing countries, especially Nigeria. Despite various government interventions aimed at solving this problem, it is still perceived that credit access is a serious challenge facing these enterprises in Nigeria. Hence, this study examined the impact of credit access on the performance of total stock of input supply of non-farm household enterprises in Nigeria. Unlike the bulk of existing studies, we employed multinomial logit regression and used the 2018 General Household Survey data. The stylised facts from the data revealed that non-farm household enterprises in urban areas have greater access to credit than their counterparts in rural areas. Interestingly, the findings indicate that even though a large chunk of the non-farm household enterprises in our sample face the challenge of access to credit, credit access nonetheless impacts significantly and positively on total stock of input supply of non-farm household enterprise in Nigeria. Among others, we recommended that credits to non-farm household enterprises should be adequately monitored not only to enhance the performance of these enterprises but also to ensure that the funds are not diverted to other uses.