AN ASSESSMENT OF THE CONTRIBUTION OF COMMERCIAL BANKS TO THE GROWTH OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

Abstract

This paper examined the contribution of Commercial banks to the growth of Small and Medium scale enterprises in Nigeria between the period of 1980 and 2009. The paper employed descriptive method of analysis. An inductive methodology involving observation, collection of secondary data and the analysis of such data was employed. To complement this approach, ratio analysis and trend analysis was also used. To this end, a lot was devoted to the presentation and analysis of data obtained from Central Bank of Nigeria’s publications such as Annual Reports, Statistical Bulletins, Journals, internet materials and text books. The work therefore, discussed the contribution of commercial banks to providing funds to small and medium enterprises as revealed in these data. It was discovered that commercial banks contribute to financing small and medium scale enterprises but their contribution has declined as the government through CBN directives abolished the mandatory bank’s credit allocations. Among other recommendations, the paper recommends that commercial banks should trim down its stringent requirements so that SMEs can benefit from loan advances as large corporations do.