Role of Microfinance Banks Credit in the Development of Small and Medium Enterprises in Lokoja, Kogi State, Nigeria

Abstract

The study employed descriptive research design to investigate the role of Microfinance Banks credits in the development of Small and Medium Enterprises in Lokoja, Kogi State, Nigeria. Descriptive statistics and Chi-square statistic were employed for data analysis and testing the postulated hypotheses. Data were obtained from one hundred Small and Medium Entrepreneurs located in Lokoja, selected through a random sampling process. The results from the study showed that Microfinance Banks credits have impact on the expansion capacity of Small and Medium Enterprises in Lokoja. The findings also revealed that Microfinance Banks have mobilized savings for intermediation and Small and Medium Enterprises development in Lokoja. The study therefore recommends that Microfinance Banks at all levels of government should be mandated by the Central Bank of Nigeria to support and promote Small and Medium Enterprises as part of the object of their establishment with proper enforcement measures to ensure compliance. In addition, policies that will minimize the entry regulations imposed on Small and Medium Enterprises, promote attainment of high levels of productivity and serve as the bedrock of stable exchange rates and low inflation should be encouraged. Furthermore, good infrastructural facilities that encourage Small and Medium Enterprises to pool their information and resources together should be put in place.