BUSINESS CREDIT AVAILABILITY AND ITS IMPACT ON SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

Abstract

Finance is a key input in the development and growth of business enterprise. One of the reasons why firms form linkages and relations with one another as well as with financial institutions is to access credit for business growth. Credit contributes to enterprises development in a number of ways. Access to external resources allows for flexibility in resource allocation and reduces the impact of cash flow problems on firm activity. Firms with access to funding are able to build up inventories to avoid stocking out in periods of crisis, while in conditions of macroeconomic instability, use of credit increases growth of surviving firms. It is founded from different results that business credibility availability has an impact on SMEs. The data for this study were purposely collected through the secondary sources and analyzed using content analysis approach. The major limitation of this research is that this study only covers the SMEs sector. Another limitation is that it excludes many variables of reward due to shortage of time. Funds were also another limitation. Apart from these limitations this research may provide insights to the managers of SMEs and Microfinance firms to make availability of funds to SMEs because they can boost the country’s economy and bring higher profit.