MICRO, SMALL AND MEDIUM SCALE ENTERPRISES FINANCING, AND ECONOMIC DEVELOPMENT IN NIGERIA

ABSTRACT

This study investigates the crucial role of Micro, Small, and Medium Scale Enterprises (MSMEs) financing in driving economic development in Nigeria. Utilizing the ordinary least squares method or analysis, the research explores the impact of MSMEs financing on various economic indicators such as real gross domestic product (GDP) per capita, prime lending interest rates, inflation rates, and unemployment rates. The model employed incorporates key variables including credit to MSMEs by deposit money banks, prime lending interest rates, inflation rates, and unemployment rates. Drawing on empirical studies, the research synthesizes findings to provide insights into the challenges and opportunities within the MSMEs sector. Key findings highlight the positive impact of microfinance banks on SME growth, emphasizing the importance of enhanced access to credit. Additionally, the study underscores the significance of targeted government interventions, particularly credit guarantee schemes, in addressing financing challenges faced by MSMEs. Overall, the research contributes to a deeper understanding of the intricate relationship between MSMEs financing and economic development in Nigeria, providing valuable insights for policymakers, financial institutions, and MSMEs themselves.