ACCESS TO FINANCIAL INSTITUTIONS' FINANCING AND THE GROWTH OF SMALL AND MEDIUM ENTERPRISES: A STUDY IN IBADAN NORTH EAST LOCAL GOVERNMENT AREA, OYO STATE.

Abstract

Promoting the growth of Small and Medium Enterprises (SMEs) is contingent upon ensuring their access to financial resources, as financial constraints often impede their development. This study sought to investigate whether access to financing from financial institutions can serve as a solution for fostering the growth of small businesses in Oyo State, Nigeria. The research sample comprised 152 SMEs, selected through purposive sampling techniques. Data analysis involved descriptive analysis, simple linear regression, and Analysis of Variance (ANOVA). The findings revealed that unimpeded access to external finance plays a significant role in facilitating the operations of SMEs and promoting their growth. Specifically, bank credit facilities were found to have a substantial impact on the growth of SMEs in the Ibadan North East Local Government Area. Consequently, it is recommended that financial institutions devise innovative approaches to provide more affordable funds to the SME sector, thereby fostering its growth within the economy.