Bank Loan Availability and the Performance of Small and Medium Enterprise in Osogbo Metropolis Osun State, Nigeria

Abstract

Existing researches have proved that bank loan availability for small scale businesses is one of the defining factors for survival and development of entrepreneurship. This study therefore examined the impact of bank loan availability on the performance of selected small and medium enterprises (SMEs) in Osun State, Nigeria. Descriptive survey research design was adopted and data were collected using a well structured questionnaire. Stratified and systematic random sampling techniques were employed in selecting the sample size. A total of 120 copies of the questionnaire were administered on the selected small scale business owners out of which only one hundred and two were adequately filled and returned. The Multiple regression and correlation analyses were used to test the hypotheses generated for the study. Findings revealed that there is a significant correlation between access to loan and performance of SMEs in Osun State (bank loan availability was statistically significant at 95% confident limit and sig 0.000); the R2 value = (0.842), implied that firm’s characteristics also have positive impact on performance in the selected SMEs in Osogbo, Osun State and the R2 value = (0.736), also implied that entrepreneur’s characteristics have significant relationship with performance of the SMEs in Osogbo, Osun State. The study concluded that bank loan availability has significant impact on the performance of SMEs in Osogbo, Osun State. The study recommended that banks should put various and active measures in place to determine entrepreneurs’ access to loan instead of loan base on personal contact’s concept.