ROLE OF MICROFINANCE BANKS IN THE GROWTH OF SMALL AND MEDIUM ENTERPRISES (SMES) IN JOS PLATEAU STATE
Abstract
This study investigates the role of microfinance banks in the growth of Small and Medium Enterprises (SMEs) in Jos, Plateau State, Nigeria. The research specifically explores the effects of domestic fund transfer services, repayable loans, financial advisory services, and financial inclusion on SME growth and performance. Utilizing a cross-sectional survey design, data were collected through structured questionnaires from a sample of 272 SMEs selected using stratified random sampling. The data were analyzed using descriptive and inferential statistics, including linear regression models. The findings indicate a significant positive relationship between domestic fund transfer services and SME growth, and between microfinance banks and financial inclusion. However, repayable loans and financial advisory services did not show a significant impact on SME performance and development, respectively. The study concludes that while microfinance banks contribute meaningfully to financial transactions and inclusion, their loan products and advisory services require substantial improvement to meet the unique needs of SMEs. Recommendations include improving access to affordable loans, enhancing the quality of financial advisory services, leveraging digital platforms to simplify financial transactions, and implementing targeted financial inclusion strategies. These efforts will enhance the effectiveness of microfinance banks in supporting SME growth and contribute to sustainable economic development in Plateau State.
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