PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KWARA STATE: THE ROLE OF GOVERNMENT

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.