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Bank Credit and Growth of Small and Medium Scale Industry in Nigeria
Subject area: Management and Commerce · Area of research: Bank Credit and SME Growth
DOI: https://doi.org/10.64388/IREV9I8-1714709
Abstract
This study examined the impact of bank credits on the growth of small and medium scale industry in Nigeria for the period of thirty-five years (i.e. 1990-2024). Data were collected from Central Bank of Nigeria Statistical Bulletin (CBN) 2025. The data consider for the study include small and medium scale enterprises (SME’s) output share of gross product, credit to private sector, interest rate, and cash reserve ratio. Ordinary Least Square (OLS) method with the aid E view 9. The result revealed that individual variables has no significant impact on small and medium scale enterprises growth in Nigeria. However, the combination of explanatory variable has significant impact of SME’s growth as reported by statistic. Hence, the study concluded that bank credit play a crucial role in the growth of small and medium scale enterprises in Nigeria. The study therefore recommends that the Central Bank of Nigeria should compel banks to increase the fund allocation for small and medium scale enterprise to serve as a pool of fund accessible only to small and medium scale enterprises.
Keywords
Bank Credit, Credit to Private Sector, Interest Rate, Cash Reserve Ratio, Small and SMEs.
How to cite this paper
@article{1714709,
author = {Kehinde Blessing Alaba, Jacob Obafemi Fatoki},
title = {Bank Credit and Growth of Small and Medium Scale Industry in Nigeria},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {8},
pages = {2189-2199},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1714709.pdf},
abstract = {This study examined the impact of bank credits on the growth of small and medium scale industry in Nigeria for the period of thirty-five years (i.e. 1990-2024). Data were collected from Central Bank of Nigeria Statistical Bulletin (CBN) 2025. The data consider for the study include small and medium scale enterprises (SME’s) output share of gross product, credit to private sector, interest rate, and cash reserve ratio. Ordinary Least Square (OLS) method with the aid E view 9. The result revealed that individual variables has no significant impact on small and medium scale enterprises growth in Nigeria. However, the combination of explanatory variable has significant impact of SME’s growth as reported by statistic. Hence, the study concluded that bank credit play a crucial role in the growth of small and medium scale enterprises in Nigeria. The study therefore recommends that the Central Bank of Nigeria should compel banks to increase the fund allocation for small and medium scale enterprise to serve as a pool of fund accessible only to small and medium scale enterprises.},
keywords = {Bank Credit, Credit to Private Sector, Interest Rate, Cash Reserve Ratio, Small and SMEs.},
month = {February},
doi = {https://doi.org/10.64388/IREV9I8-1714709}
}