THE ROLE OF ACCESS TO FINANCE IN ENHANCING ORGANIZATIONAL PERFORMANCE: A STUDY OF SMALL AND MEDIUM ENTERPRISES
Maryam Isyaku
Volume 5 Issue 1
Abstract
Access to finance is a critical factor influencing the performance and growth of Small and Medium Enterprises (SMEs), particularly in developing economies like Nigeria. This study examines the relationship between financial accessibility and organizational performance, with a focus on identifying the barriers SMEs face in obtaining adequate funding. Using a conceptual framework, the study explores how improved access to financial resources can enable SMEs to invest in technology, human capital, and market expansion, ultimately enhancing their competitiveness and profitability. Findings reveal a strong positive correlation between access to finance and organizational growth, highlighting the transformative potential of financial inclusion for SMEs. However, challenges such as stringent collateral requirements, high-interest rates, and information asymmetry persist, limiting the financial options available to SMEs. These insights underscore the importance of targeted interventions by policymakers to create an enabling financial environment and empower entrepreneurs. This study contributes to the discourse on entrepreneurial finance by offering actionable recommendations for addressing financing constraints. Future research should focus on sector-specific dynamics and the potential of digital financial solutions in bridging the finance gap for SMEs. Keywords: Entrepreneurial Finance, SMEs, Access to Finance, Organizational Performance, Financial Inclusion
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