DEVELOPMENT FINANCIAL INSTITUTIONS AND SMALL MEDIUM ENTERPRISES DEVELOPMENT IN OSUN STATE, NIGERIA

Abstract

This study examined the role of Development Financial Institutions (DFIs) in the development of Small and Medium Enterprises (SMEs) in Osun State, Nigeria. With the adoption of survey method, one hundred and thirteen SMEs owners were involved through the administration of structured questionnaire where the reliability and validity test of the research instrument were ascertained by the use of the Cronbach’s Alpha tests and the Pearson Product Moment
Correlation Coefficient respectively. Data gathered was analyzed with simple frequency table and multiple regression analysis. The results obtained revealed that SMEs in Osun State has not expanded due to the high interest rate charged by the DFIs on loan, SMEs in Osun State were underdeveloped due to inability to access adequate business funding from the DFIs and DFIs have not met up with SMEs financial demands. It was concluded that the SMEs in Osun State have not attained the desired level of development due to the inadequacy of DFIs to have provided appropriate financial support. It was therefore recommended that government should ensure effectiveness of DFIs so that SMEs owners would be encouraged to explore credit facilities from them; interest rate charge on loan facilities for SMEs be reviewed in order to encourage the owners of SMEs from accessing them; and adequate funding of DFIs in order to
have the financial base to meet up with the required SMEs financial needs.