Abstract
The survey research design was adopted, and the study was specifically designed to evaluate the challenges of bank-credit among SMEs in Nigeria and make recommendations. The questionnaire and indent interview methods were used to generate data. Data generated were coded and analyzed through tables, frequencies, percentages and X2. Bank credit refers to loans, advances and discounts (LAD) extended to borrowers for productive ventures. Nigerian Banks are still very slow in lending to SMEs. They believe that SMEs are usually not properly organized and therefore consider lending to the sector highly risky. Where they must lend, they insist on stringent loan processes including the provision of adequate collateral. These stringent loan processes frequently cut off many SMEs from having access to bank credit, and to check insider fraud, banks have placed embargo on lending without collateral. The study found that it is not easy for SMEs to have access to bank credit in Nigeria. Ten recommendations were made based on the result of the study.
Highlights
Bank-credit refers to loans, advances and discounts (LAD) of specified sums, terms and other conditions made available to individuals and entrepreneurs to start, grow or sustain any productive activity
Aganga (2012) explained that the Federal Government of Nigeria (FGN) is executing marching programmes for small and medium enterprises in collaboration with the states to remove the bottlenecks associated with securing collateral and make it easier for SMEs to have access to loans to start or expand their businesses
It is hoped that the problems of small and medium scale enterprises can be minimized if the recommendations of this research are implemented
Summary
Bank-credit refers to loans, advances and discounts (LAD) of specified sums, terms and other conditions made available to individuals and entrepreneurs to start, grow or sustain any productive activity. The Nigerian Industrial Development Bank (NIDB) was established in 1964 Another milestone in the evolution of SMEs in Nigeria was the indigenization Decree of 1972, as amended in 1977. Due to the perceived inability of these banks to meet the credit needs of SMEs, Babangida announced granting of banking licenses to new banks that would specialize and devote their resources to assist small-scale farmers and small scale industries. Among such specialized banks introduced included the Peoples Bank of Nigeria (PBN) 1989 and Community Banks (CB), 1993 (Ejiofor, 1987, Okenwa,1999)
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