EFFECT OF SMALL AND MEDIUM ENTERPRISES DEVELOPMENT AGENCY (SMEDAN) MICRO-CREDIT AND LOAN REPAYMENT ON SMALL AND MEDIUM ENTERPRISES (SMEs) GROWTH IN NASARAWA STATE, NIGERIA
John Reuben,Hussaini Tukur Hassan PhD and Njoku, Chukweemeka Nnamdi
Volume 4 Issue 1
Abstract
Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) was established to promote and facilitate the development programmes, instruments and support services to accelerate development of Small and Medium Enterprises, linking SMEs to internal and external sources of finance, and providing access to industrial infrastructure, such as layouts, incubators and industrial parks among others. This study aimed to examine the effect of SMEDAN micro-credit and loan repayment on small and medium enterprises (SMEs) growth in Nasarawa State, Nigeria. Ex post facto research design was adopted to utilised a sample data from 2007-2022. The data collected were analysed using ARDL (Autoregressive Distributed Lag) model for the estimation of long-run coefficients. In a short run the result shows that a significant effect exists between loan repayment and SMEs growth. The results also revealed that loan repayment and micro-credit have a positive and significant effect on SMEs growth in a long run. Based on the findings, the study recommended that SMEDAN should prioritize improving the accessibility of micro-credit to SMEs in Nasarawa State by streamlining the application process, reducing bureaucratic hurdles, and increasing awareness of the availability and benefits of SMEDAN micro-credit programmes. Furthermore, SMEDAN should consider designing loan repayment structures that align with SMEs' cash flow patterns and business cycles through offering flexible repayment schedules, moratoria, and moderate interest rates in order to alleviate the financial burden on SMEs and enhance their ability to meet loan repayment obligations. Keywords: SMEDAN, Loan Repayment, Micro-credit, Growth, SMEs
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