Deposit Money Banks’ Lending Policy on Access to Credit: A Study of Selected Packaged Water Ventures in Ilorin Metropolis
Loading...
Date
2021-12-03
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Economics and Development Policy (Gombe State University, Gombe).
Abstract
Small businesses have in recent time contributed immensely to global economic output. However, in Nigeria, poor access to credit facilities from deposit money banks (DMBs) has constituted a serious impediment to the growth potential of the subsector. This study examined the impact of DMBs lending policy on credit access to SSEs in Ilorin metropolis. Descriptive survey design was adopted for the study involving twenty-seven (27) packaged water ventures selected using purposive sampling technique. Research hypotheses were tested with regression analysis, correlation and t-test statistical tools at 0.05 alpha levels. The results obtained from the analyses showed that interest rate has negative effect on credit access. The findings further revealed that collateral requirements (landed assets, other assets/facilities) significantly affect working capital loan. More so, it was revealed that business record such as financial statement, sales records, bank account records, business plan, customer record and evidence of insurance service have positive effect on credit access. The study concludes that both interest rate policy and collateral requirements have combined effect on credit access from DMBs to SSEs. It was recommended among others that management of deposit money banks should be strategic at implementing and or executing interest rate while the regulatory body and other stakeholders should regularly review the market trends and other parameters while making lending policies.
Keywords: Deposit money bank, lending policy, credit access, collateral, interest rate
Description
The study examined the impact of DMBs lending policy on credit access to SSEs in Ilorin metropolis. Descriptive survey design was adopted for the study involving twenty-seven (27) packaged water ventures selected using purposive sampling technique. Research hypotheses were tested with regression analysis, correlation and t-test statistical tools at 0.05 alpha levels. The results obtained from the analyses showed that interest rate has negative effect on credit access. The findings further revealed that collateral requirements (landed assets, other assets/facilities) significantly affect working capital loan. More so, it was revealed that business record such as financial statement, sales records, bank account records, business plan, customer record and evidence of insurance service have positive effect on credit access. The study concludes that both interest rate policy and collateral requirements have combined effect on credit access from DMBs to SSEs. It was recommended among others that management of deposit money banks should be strategic at implementing and or executing interest rate while the regulatory body and other stakeholders should regularly review the market trends and other parameters while making lending policies.
Keywords: Deposit money bank, lending policy, credit access, collateral, interest rate
Keywords
Citation
Adebayo, P. O. (2022). Impact of Deposit Money Banks’ Lending Policy on Access to Credit: A Study of Selected Packaged Water Ventures in Ilorin Metropolis. International Journal of Economics and Development Policy (Gombe State University, Gombe). 4(2)148-163