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SMEs FINANCING AND ITS EFFECT ON MANUFACTURING SECTOR GROWTH IN NIGERIA: AN EMPIRICAL ASSESSMENT

European Journal of Economic and Financial Research

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Title SMEs FINANCING AND ITS EFFECT ON MANUFACTURING SECTOR GROWTH IN NIGERIA: AN EMPIRICAL ASSESSMENT
 
Creator Ezeaku, Hillary Chijindu
Anidiobu, Gabriel A.
Okolie, Paschal I. P.
 
Subject SMEs, manufacturing sector, error correction model, Nigeria
 
Description This paper assessed the effect of SMEs financing on manufacturing sector growth in Nigeria using annualised data from 1981 to 2014. A cointegrating relationship was determined using the Engel and Granger residual based approach which showed evidence of a long-run relationship between SMEs credit and manufacturing output growth in Nigeria. The results of the error correction model showed that SMEs financing had exerted positive influence on the manufacturing sector growth. The finding indicated that when credits to the SMEs increased by 1%, manufacturing output rose by 14.5%. The results also revealed that interest rate and inflation rate had negative effect on manufacturing sector growth. A unit change in interest rate led to 15.7% fall in output growth of the manufacturing sector. We conclude that while SMEs is an important sector that can drive the Nigerian economy, rising interest rate stifles their growth and overall economic impact. This sector needs nurturing hence the government and monetary authorities should make policies and create enabling environment for SMEs to thrive. Access to fund should also be made easy and at low interest rate.  Article visualizations:
 
Publisher European Journal of Economic and Financial Research
 
Contributor —
 
Date 2017-05-24
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier https://oapub.org/soc/index.php/EJEFR/article/view/98
 
Source European Journal of Economic and Financial Research; Volume 2, Issue 2, 2017
 
Language eng
 
Relation https://oapub.org/soc/index.php/EJEFR/article/view/98/284
https://oapub.org/soc/index.php/EJEFR/article/view/98/285
https://oapub.org/soc/index.php/EJEFR/article/view/98/286
 
Rights Copyright (c) 2017 Hillary Chijindu Ezeaku, Gabriel A. Anidiobu, Paschal I. P. Okolie