Abstract:
This study investigated the role of Government/financial institutions on small and enterprises
(SMEs) performance in Kwara State, Nigeria. The study examined the roles played by the
government and financial institutions in SMEs development; to determine the extent at which
government and financial institution provides loan/credit facilities for the development of SMEs,
assessed the impact of small and medium scale enterprises (SMEs) on the growth and development
of the economy; and examined the challenges faced in the development of SMEs. For the purpose
of the study, a total sample of 70 respondents of SMEs owner, Small and Medium Scale Enterprises
Development Agency of Nigeria (SMEDAN), staff of Accion Micro-finance bank in medium
Kwara State. Questionnaires were used to elicit information from the respondents. The data
collected were analyzed using table, graph, frequency, percentage, mean, standard deviation, and
the hypotheses for the study was tested with Chi-square (X 2 ) test statistics. The study showed the
roles of government and financial institution in SMEs are; to provide loan, formulate policies for
and regulate SMEs activities. It was revealed that government and financial institutions gives
loans/ credits for SME's development and they are willing to assist SME's in granting credit/loan
facilities. The challenges faced by SMEs were identified as high interest rate, difficulties in
accessing credit and low coordination between institutions. It was further revealed that the impact
of SMEs to the growth and development of the economy are; to generate employment and reduce
poverty, provide wealth creation, technology development, and increase utilization of local
resources. The findings also showed SMEs are very important to the economic growths and
developments of a state. The study concluded that, Government and Financial institution should
cut down the interest rate to a single digit, formulate and promote policies that will facilitate the
rapid development of SMEs, provide good infrastructural facilities such as roads, electricity and
water supply, and create business incubators or technology parks for new SMEs where they can
be based for first 1-2 years.
