Impact of Financial Intermediation on the Growth of small Scale Businesses in Nigeria

International Journal of Research and Scientific Innovation (IJRSI) | Volume VIII, Issue V, May 2021 | ISSN 2321–2705

Impact of Financial Intermediation on the Growth of Small Scale Businesses in Nigeria

Alhassan Odiniya Innocent, Adjekughele Eyere Harriet, Nwogbo Chimezie Rose, Williams Blessing Nkemakonam, Ifidi Bodisere Judith Dienein
Department of Accounting, Federal Polytechnic Ekowe, Bayelsa State, Nigeria

ABSTRACT
This study examined the impact of financial intermediation on the growth of small scale businesses in Nigeria. Secondary data was collected from Central Bank of Nigeria Statistical Bulletin. The specific objectives of the study were to; ascertain the impact of deposit money banks credit on small scale businesses in Nigeria, to determine the impact of savings on small scale businesses in Nigeria, to ascertain the impact of banks total asset on small scale businesses in Nigeria. The research design was ex-post facto research design, and the study used multiple regression analysis statistical technique. The results revealed that deposit money banks credit to small scale enterprise do not have significant impact on small scale businesses in Nigeria, savings does not have significant impact on small scale businesses in Nigeria, bank total asset have significant impact on small scale businesses in Nigeria. Thus, we conclude that financial intermediation influenced small scale businesses positively and significantly in Nigeria. Recommendations were that banks should be more efficient in mobilizing and allocating funds to entrepreneurs in the real sector. The regulatory authorities should continuously take measures to liberalize the financial system to avoid any form of shock on the system.

Key words: Financial Intermediation, Small Scale Businesses

1.1Introduction

Small scale business plays very important roles in the development of nations, especially in an emerging economy such as Nigeria. They play a significant role in national economy by providing various goods and services, creating job opportunities, developing regional economies and communities, helping the competition in the market and offering innovation. Main areas of their presence are manufacturing industry, distribution industry and services. A business which functions on a small scale level involves less capital investment, less number of labor and fewer machines to operate is known as a small scale business. Small scale Industries or small businesses are the type of industries that produces goods and services on a small scale. These industries play an important role in the economic development of a country. The owner invests once on machinery, industries, and plants, or take is a lease or hire purchase. Few examples of small-scale businesses are paper, toothpick, pen, bakeries, candles, local chocolate, etc., industries and are mostly settled in an urban area as a separate unit. The small-scale industry is seen as a key to Nigeria’s growth and alleviation of poverty and unemployment in the country. Therefore, promotion of such enterprises in developing economies like Nigeria is of paramount importance since it brings about a great distribution of income and wealth, development of indigenous technology,

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