INFORMAL FINANCES AND GROWTH OF SMALL AND MEDIUM SCALE ENTERPRISES IN MAKURDI METROPOLIS, BENUE STATE

ABSTRACT The study investigates effect of Informal Finances on the growth of small and medium enterprises in makurdi metropolis, Benue State. The study specifically sought to find out effect of self-help group credit sources, family and friends resources and trade credit sources on the growth of small and medium scale enterprises in Makurdi Metropolis, Benue State. The study adopted a survey research design with the population of 185 registered small and medium scale enterprises in Makurdi Metropolises, Benue State, which also represent the sample sized of the study. Questionnaire is used as an instrument of data collection. Descriptive statistics were used to analyzed the data. The findings of the study shows that, self-help group credit sources, family and friends credit sources, and trade credit has significant effect on the growth of small and medium scale enterprises in Makurdi metropolis Benue State. The study concluded that informal credit sources have a significant effect on the growth of small and medium scale enterprises in Makurdi metropolis, Benue State. The study finally recommended that, interest charged on savings by group members should be reduced to encourage enterprises to penetrate into entrepreneurial activities and there should be flexibility in loan repayment by family and friends to encourage business owners and owner of SME’s should be willing to extend credit to customers to enable them purchase goods and services on credit wherever they cannot make prompt payment.