Determinants of Small and Medium Size Enterprises Access to Credit Schemes in the Mezam Division of Cameroon

Abstract

Promoting small and medium size enterprises is a governmental strategy aimed at achieving national economic development through poverty alleviation, employment creation and other income generation activities. This study examined the determinants of small and medium size enterprises access to credit schemes around Mezam Division located in the North West Region of Cameroon. A two-stage sampling technique was used to obtain data from over 294 enterprises. Descriptive statistics and logit regression analysis were used to analyze the data. Results revealed that 5.8% of the small and medium size enterprises had accessed bank credit only while 92.2% obtained finance from informal credit sources. The logit analysis indicated that access to formal credit was determined by the educational level of the enterprise owner or manager, longevity in business, and the availability of collateral security. Government policies with respect to credit access by enterprises should be involved and begin from both lenders and creditors.