ASSESSMENT OF DEPOSIT MONEY BANKS FINANCING ACTIVITIES AMONG SMALL & MEDIUM ENTERPRISES IN PLATEAU STATE.

Abstract

Small and Medium Enterprises (SMEs) are critical to the development of any economy as they possess great potentials for development of indigenous entrepreneurship, employment output diversification, and so on. However, in developing countries, particularly Nigeria, SMEs find it difficult to obtain finance thus lack access to capital and money markets. Despite efforts by financial institutions and public sector bodies to close funding gaps, SMEs continue to experience difficulties in obtaining capital. This study examined the benefits that SMEs in Plateau State derive from Deposit Money Banks (DMBs) financing. Using a quantitative method via survey, 280 questionnaires were distributed to different owners of SMEs in Jos North, Plateau State. Data analysis was carried out via descriptive statistics and Chi-Square. The study findings indicate that SMEs obtain finance from Deposit Money Banks, and the obtained loan aided the growth and development of SMEs significantly. This study concludes that SMEs obtain finance from Deposit Money Banks, and the obtained loan has significant impact on the growth and development of SMEs hence government policies should aim to reduce cumbersome procedure, collateral requirement and timely sanctioning of loan defaulters. The study recommends that government should compel DMBs to focus more on financing SMEs at startup, as well as relax the interest rates.