DEPOSIT MONEY BANKS' FINANCING OF SMALL SCALE BUSINESS AND NIGERIAN ECONOMIC GROWTH
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Date
2014
Journal Title
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Volume Title
Publisher
DEPARTMENT OF ACCOUNTING, KADUNA STATE UNIVERSITY (KASU)
Abstract
Unemployment and poverty can be brought to a minimum in Nigeria if the strength of it's small business entrepreneurs can be combined with loan accessibility. The 2013 World Bank development report revealed that both small and medium-scale enterprises operating in Nigeria contribute less than 5% to the Nigerian Gross Domestic Product (GDP), as opposed to over 40% and 50% in Asian countries, the United States, and Europe, respectively. Perhaps the deposit money banks are not carrying on their traditional lending functions to small businesses as expected, and that led to their little contributions to the Nigerian GDP as compared to their Asian and United States counterparts. This study therefore examines the influence of deposit-money bank financing on small businesses and economic growth. Primary and secondary data were used. The data obtained was subjected to OLS regression. Findings showed that loans advanced by the deposit money banks to small businesses have significant impacts on the Nigerian GDP, though with attendant challenges. The study therefore recommends that the central bank of Nigeria should ensure adequate monitoring of the deposit money banks by ensuring that their primary lending function is made to small-scale businesses, as this will not only positively impact their contribution to GDP but also positively impact entrepreneurs economic lives vis-à-vis job creation and poverty alleviation.
Description
This study examined the influence of deposit money bank financing on small businesses and economic growth in Nigeria, revealing that loans to small businesses significantly impact GDP despite challenges and recommending that the Central Bank of Nigeria should ensure banks focus on lending to small businesses to boost GDP, job creation, and poverty alleviation.
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Citation
Ademokoya, A. A., and AINA, T. J. (2014): Nigerian economic growth: Role of deposit money banks in small business financing. KASU Journal of Accounting Research and Practice. 3(2): 63-73, Published by the Department of Accounting, Kaduna State University, Kaduna, Nigeria. Available online at https://www.academia.edu/120280299/DEPOSIT_MONEY_BANKS_FINANCING_OF_SMALL_SCALE_BUSINESS_AND_NIGERIAN_ECONOMIC_GROWTH