Institutional Financing of Small and Medium Enterprise and Economic Growth in Nigeria

Abstract

This study investigates the effect of institutional financing and economic growth in Nigeria. This study aims to evaluate the impact of SMEs financing on economic growth of Nigeria during the period 30 years from 1995 to 2024. Ex-post factor research design was adopted for this study. The population of the study consists of all twenty-two (22) quoted deposit money banks in Nigeria. The time series data for this study will be collected from secondary source. The data was obtained from the Central Bank of Nigeria Statistical Bulletin, National Bureau of statistic report and other relevant reports covering 30 years’ period from 1992-2022. The Autoregressive distribution Lag (ARDL) model was used in testing the research hypotheses for this study. Findings from this study shows that DMB Loan has a negative insignificant effect on gross domestic product in Nigeria. Micro Savings has a positive significant effect on gross domestic product in Nigeria. Micro Loan and Advances has a positive significant effect on gross domestic product in Nigeria. The study concludes that institutional financing of small and medium enterprise and economic growth in Nigeria had no significant effect from 1995-2024. The study recommends among others that financial credit institutions should increase and mobilize more funds through effective windows of financial intermediation and enhance a better policy that will make small and medium enterprises easy access to credit facilities.