The effect of business credit availability on small and medium scale enterprises in Nigeria play a significant part in the industrialization and economic progress of both emerging and established countries. Small Medium Businesses, in addition to raising per capita income and output, create jobs, improve regional economic balance through industrial dispersal, and generally encourage effective resource usage, all of which are vital to engineering economic development and growth.

The effect of business credit availability on small and medium scale enterprises in Nigeria

Nonetheless, despite their growth, the crucial role performed by Small Medium Businesses is hampered by insufficient funding and poor management. One of the key restrictions has been recognized as the unfavorable macroeconomic climate, which encourages financial institutions to be risk adverse when supporting small and medium-sized firms. Financial institutions’ reluctance to fund Small Medium Businesses can be explained by the following factors.


Due to their risky nature, small firms and entrepreneurial initiatives, which are often regarded the motor that drives the economy, are frequently rejected credit. This alarming threat has persisted for a long time and requires immediate attention from both government and non-governmental organizations.

The significance of small enterprises in Nigeria’s development cannot be overstated. The economy as a whole will suffer if small firms do not have access to adequate credit. Small enterprises must succeed in order for economic planning goals to be met. With this in mind, the Bank of Nigeria has streamlined its lending operations to guarantee that bank credit is used to help Nigeria’s small and medium companies. The goal of this method is to make things better.


The following goals are the focus of this paper:

1. To investigate the interaction between small enterprises and financial institutions in Uyo that provide business loans.

2. To identify the obstacles that small firms in Uyo experience in obtaining business finance.

3. Determine the extent to which small enterprises in Uyo can obtain business loans.

4. To determine the impact of small business loan availability on Uyo’s small companies.


The researcher employed the following questions to accomplish the study’s research objectives:

1. What kind of relationship do you have with credit-granting banking institutions in Uyo?

2. What obstacles do you experience in obtaining finance for your company?

3. How often do you get approved for business finance when you apply?

4. How has the availability of business credit impacted your company?


H0: In Nigeria, SMEs do not have easy access to loans.

H1: In Nigeria, SMEs have easy access to business loans.


This research is significant because it aims to investigate the impact of business loan availability on small firms in Uyo. The paper will make some recommendations for policymakers, development agencies, entrepreneurs, and small company managers to help them find better ways to expand small business credit and appropriate tactics to strengthen Nigeria’s small business sector.

Second, the study is important because it suggests to small businesses tactics they may use before requesting business financing in order to make the borrowing process smoother and more effective. This will significantly improve the efficiency and profitability of Uyo’s small companies. When these strategies are implemented, access to business finance becomes easier.


Uyo, in Nigeria’s Eastern region, was chosen as the study’s location. The research is limited to the effects of business credit availability on small enterprises in Uyo, with a focus on a variety of small firms in the city.


The researcher ran into the following issues while doing this study:

1. The investigation was completed in a short amount of time. Due to other academic obligations, there was only a limited amount of time available for study.

2. In addition, responses to the researcher’s questionnaire from diverse small business owners were a little delayed. This is due to the fact that the respondents have a lot of work to do.


The project will be divided into the following sections:

The first chapter provides an overview of the research project. It provides basic information about the company as well as the study that is being conducted. The backdrop of the study and organizational profile, as well as the statement of the problem, objectives, research questions, significance of the study, scope of the investigation, and limits encountered by the researcher, are all included in this chapter.


The literature review and theoretical framework are presented in Chapter 2.


The research approach is detailed in the third chapter. The research technique refers to the many approaches and procedures that the researcher employed to gather data.


The material acquired by the researcher is analyzed and interpreted in Chapter Four.


The findings and conclusion of the study are presented in Chapter 5.

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