COMMERCIAL BANKS’ LENDING AND THE GROWTH OF SMALL AND MEDIUM ENTERPRISES (SMES) CREDIT IN NIGERIA
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Abstract
The Small and Medium Scale Enterprises (SMEs) in Nigeria which are regarded as the engine room for employment generation, poverty reduction, rapid and sustainable industrialization as well as economic growth and development, etc. have been militated against by numerous problems such as inadequate infrastructural facilities, high rate of enterprise mortality, poor implementation of economic policies and a plethora of others. Therefore, this research evaluated the effect of commercial banks' lending on the growth of SMEs in Nigeria. This study made use of secondary data to achieve its results through econometric analysis by way of multiple regressions. The findings of the research indicated that commercial banks' total credit have negative impact on the growth of SMEs in Nigeria. However, there is a positive relationship between their maximum lending rate of interest and lending to the SMEs sub-sector which is in conformity with the theoretical underpinning adopted for this work. This study therefore, recommended that government should facilitate the availability of and access to loans and equity finance, particularly medium to long term opportunities to improve trade and investment capacity of SMEs.