EFFECT OF MANUFACTURING SMEs ATTRIBUTES ON DEPOSIT MONEY BANKS’ LENDING IN NIGERIA

The performance of SMEs manufacturing firms in Nigeria has been a growing concern in recent times inspite of the huge attempt by financial institution to support their activities. Despite significant attempt by Deposit Money Banks in bridging financing gaps for businesses, SMEs manufacturing firms still find it difficult to access finance to meet their investment in productive raw materials and working capital requirement for expansion. The study investigates the effect of manufacturing SMEs Attributes on Deposit Money Bank Lending in Nigeria. It adopted the survey research design and used Primary sources of data to obtained data from respondents through questionnaires. The research also employed simple regression technique as the tool of analysis. Using a proxy of firm locations, collateral requirement, firm size, firms age and firms output as independent variables on one hand, and lending to manufacturing firms as the dependent variables on the other hand, the study found out that each of the independent variable have significant and positive effect on the lending to manufacturing SMEs firms in Nigeria. In more specific terms, collateral requirement was found to have significant positive effect on Deposit Money Bank lending to manufacturing firms in Nigeria. In the same light, firm location was also discovered to have positive and significant effect on Deposit Money Bank lending to manufacturing firms in Nigeria. Again, it was noticed that firm size and firm age have positive and significant effect on Deposit Money Bank lending to manufacturing firms in Nigeria. And finally, output was also noticed to have significant but negative effect on DMBs lending to manufacturing firms in Nigeria. This further implies that all the variables of firm location, collateral requirement, firm size and age attracts bank lending to manufacturing firms in Nigeria. It is therefore recommended that the manufacturing firms in the sector should make serious effort in having bank required securities or properties that will enable them access loans easily from DMB in Nigeria; be sited close to where Deposit Money Banks can reach them for better assessment, monitoring and granting of loans; invest and maintain a large asset size that will put them at advantage position to have the right bargaining power in negotiating better credit terms and make concerted effort in ensuring their continuity and sustainability by operating within their strength and capacity