Impact of Microfinance Services on Performance of Small and Medium Scale Enterprises (SMEs) In Zaria Metropolis

Abstract

The success of Micro Finance Institutions (MFIs) across the world have increasingly become enthusiastic in the promotion of financial services to the poor as a development intervention tool and specifically to reduce poverty a-s it stimulates the growth of micro enterprises by developing new markets and promoting a culture of entrepreneurship. However, the efficiency of the MFIs in the highly volatile environment of Small Medium Enterprises (SMEs) in Nigeria has not been empirically investigated in Zaria metropolis. It was on this note that the study examines the Impact of Microfinance services on Performance of Small and Medium Scale Enterprises in Zaria metropolis. The research design used was cross sectional and descriptive. A sample of 300 SMEs operating with Cred Microfinance bank within Zaria Metropolis were selected. Primary data was used while questionnaire was the data collection instrument adopted. Data was analyzed using regression analysis where SPSS 20.0 was used to process the data. The study revealed that the microfinance services have significant impact on the level of entrepreneurship activities of SMEs in Zaria metropolis. The study recommends that the amount of loan given by MFIs to SMEs should be increased and they should also be encouraged to save to enable them grow and propel their enterprises.