MICROFINANCE BANK SERVICES AND SMALL AND MEDIUM-SCALE ENTERPRISES SURVIVALIN NORTH-CENTRAL NIGERIA

Abstract

Eighty per cent (80%) of small and medium scale enterprises (SMEs) in Nigeria exited
commercial undertakings before five (5) years of operation, one of the reasons adduced to
this is inadequate access to finance as they were considered un-bankable by commercial
banks. The existence of micro-finance institutions creates a platform for securing loans
devoid of administrative bottlenecks associated with commercial banks. The study,
therefore, examines microfinance bank services and SMEs' survival in North-Central
Nigeria. Data were elicited from 370 respondents who were selected using a 4-stage
sampling procedure. This was done with the aid of copies of the questionnaire while
analysis was achieved using descriptive statistics and ordinary least square regression.
Variables that significantly explained the survival of small and medium-scale enterprises
among the respondents were: microfinance banking, monitoring and supervision, training
and capacity building as well as group formation. Non-financial services of microfinance
banks, with special emphasis on the provision of supervision/monitoring, should be
improved upon as a way of beefing up the survival rate of SMEs in the region. An attempt
should also be made to improve the quality of training and capacity-building services
rendered by microfinance banks to exert a positive influence on SMEs' survival.