Impact of Development Bank’s Credit Financing on Small and Medium-Scale Enterprises Performance

Abstract

This study examined the impact of Development Bank Credit Financing (DBCF) on the performance of small and medium enterprises, employment generation growth, financial asset growth and profit growth in Nigeria. A survey research design was employed; 398 SMEs were randomly selected from the beneficiaries of DBCF loans. Descriptive analysis was conducted, and binary logistic regression was employed to examine the impact of DBFC on SMEs. The result showed that the DBCF Amount of Credit Loan Received (ACLR) positively impacted the growth of SMEs, given their beta coefficients of 0.510 and 0.765, respectively. Their respective p-values and Wald statistics of 0.001, 0.001 and 14.050, 13.486 show their significance level. However, it was discovered that there is no significant impact of DBCF on the profit growth of SMEs in Nigeria. The average monthly tax payment (AVMTL) made by the micro, small and medium enterprises (MSMEs) was established to negatively impact on SMEs profit. The coefficient (β) = - 1.004 (100.4%) showed that a unit change in the AVMTL while holding other variables constant led to about 1.004 unit decline in the logit, SMEs profit. Specifically, it means MSMEs profit will decrease by the exact amount of what is paid as tax.