Implications of Development Bank Finance on the Growth and Development of Msmes in Nigeria (2010-2017)

Abstract

Developing a sustainable source of finance for MSMEs has remained a perennial problem as a result of their poor accounting systems and lack of, or low-valued collaterals. This study examined the impact of development bank finance on the growth and development of MSMEs in Nigeria from 2010 – 2017 with specific objectives of determining whether MSMEs have poor accounting systems, the extent to which SMEs financing depend on sound accounting practices and whether MSMEs funding depend on collateral using the survey research design method. Ordinary Least Square Regression (OLS) Technique was used to analyse the data obtained from primary and secondary sources. The study found that MSMEs in Nigeria have a poor accounting practice, access to finances by MSMEs depend largely on a sound accounting practice and that the volume and value of credits to MSMEs depend on the availability of collaterals. The study recommends that SMEs should install a sound internal control system MSMEs should ensure a sound accounting practice that conforms with the internationally accepted accounting standards in order to boost their access to funding, and MSMEs should invest a portion of their capital in non-current assets in order to increase the value of their collaterals and, hence, have expansive access to funding. Keywords: Sound Accounting Practices, Collateral, Non-Current Assets, and funding.