Obokoh, L.O., Monday, J.U. & Adegbayibi A. T. (2012: “Impact of Microfinance Banks on Manufacturing SMEs Access to Finance and Development in Nigeria. Proceeding of the 1st Annual International Conference on Issues and Challenges in Accounting, Gove

Abstract                                                                                                                                                                                                       

Despite SMEs’ significant role in economic development, empirical studies revealed that inadequate finance was a key constraint militating against the development of SMEs in Nigeria, especially those in the manufacturing sector. To tackle this problem, the Federal Government in 2007 set up the Microfinance Banks. This study therefore assessed the impact of the Microfinance Banks (MFBs) on the development of manufacturing SMEs in Nigeria. Data were obtained through structured questionnaire administered to 50 manufacturing SMEs, supported with interview conducted on 5 entrepreneurs, and 5 operators of Microfinance Banks. The findings showed that MFBs had been supportive to SMEs not only in providing financial services but also social intermediation services. MFBs had significantly contributed to the development of manufacturing SMEs in Nigeria. Cumbersome process and high interest rate were found to be chief challenges facing SMEs in accessing finance from MFBs. Poorly packaged business plan/proposal was indicated by the banks to be a key factor inhibiting SMEs access to funds. The study recommended that the guidelines of MFBs should be flexible in order to accommodate more SMEs and Nigerian government should provide special funds to subsidize for the high interest rate.

Keywords: Microfinance, SMEs, entrepreneurship, finance, non-financial services, productivity.

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