EFFECT OF PRIVATE SECTOR CREDIT ON SMES PERFORMANCE IN NIGERIA
Aisha Salisu Wakili, Mustapha Mukhtar , Oyeniran Ishola Wasiu and Alfa Yakubu
Volume 14 Issue 2
Abstract
This study investigates the effect of private sector credit on SMEs performance in Nigeria spanning the period 1990-2024. Data for the study were obtained from World Development Indicators (2024). The Vector Error Correction Model was used to examine both the short run and the long-run relationships between private sector credit and SMEs performance. The empirical result indicates that private sector credits have statistically significant and positive effect on SMEs performance in Nigeria implying that increased access to credit enhances SME output and productivity. While in a short-run, private sector credit indicates a positive but marginally significant impact on SMEs performance. The study concludes that private sector credit plays a crucial role in enhancing SMEs performance in Nigeria. The study therefore recommends that the government, financial institutions, monetary authorities should improve SMEs' access to affordable credit and also strengthen financial inclusion policies. Keyword: Private Sector Credit, SMEs Performance, Financial Inclusion, Credit Assess, Vector Error Correction Model
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