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Social Capital, Credit Access and Household Nonfarm Enterprises in Nigeria: A new Empirical Evidence

Author

Listed:
  • Emmanuel O. Nwosu
  • Anthony Orji
  • Nathaniel E. Urama
  • Chisom Emecheta
  • Queen O. Chukwuma
  • Joseph Nnaemeka Chukwuma

Abstract

This paper investigates the effects of social capital on access to credit by household nonfarm small enterprises in Nigeria. Specifically, the paper tries to ascertain how social capital determines ability of household small businesses to borrow from formal and informal sources and the amount of credit accessed. The study uses data from the General Household Survey to estimate probit and Heckman selection model that form the basic models of the study. Specifically, the results show that belonging to informal groups increases the probability of accessing credit by 1.88%, and also has significant positive impact on the probability of using the loan to operate the enterprise. Also, membership of cooperatives significantly increases the probability of accessing enterprise loan. The results show that belonging to cooperatives and informal groups are the only social capital variables that have statistically significant impact on the amount borrowed.

Suggested Citation

  • Emmanuel O. Nwosu & Anthony Orji & Nathaniel E. Urama & Chisom Emecheta & Queen O. Chukwuma & Joseph Nnaemeka Chukwuma, 2023. "Social Capital, Credit Access and Household Nonfarm Enterprises in Nigeria: A new Empirical Evidence," Forum for Social Economics, Taylor & Francis Journals, vol. 52(1), pages 1-21, January.
    • Handle: RePEc:taf:fosoec:v:52:y:2023:i:1:p:1-21
    DOI: 10.1080/07360932.2020.1825983
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    Cited by:

    1. Stephen Morse & Nora McNamara & Nancy Nathan & Shuaibu Adamu & Oluwayemisi Idowu Micah & Muhammed Kabir & Augustine Sunday Onwuaroh & Nathaniel Otene, 2023. "The Leveraging of Support by Faith-Based Social Groups in Rural Villages of the Federal Capital Territory, Nigeria," Sustainability, MDPI, vol. 15(19), pages 1-19, September.

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