CHALLENGES FACED BY MICRO AND SMALL ENTERPRISES IN ACCESSING BANK CREDIT IN DAMATURU METROPOLIS

The concept of business dated back to antiquity and for effective business endeavor, it is incumbent for finance to be made available so that business will survive and grow. This make the availability of finance the backbone of every business, therefore the study examine the various challenges faced by micro and small enterprises in accessing credits from banks with the objective to determine how the challenges can be overcome. Both primary and secondary source of data had been employed, while the population of the study are the Micro and Small Enterprises (MSE’s) in Damaturu metropolis, Yobe state, using a sample of 40 respondents drawn from the population through a simple random sampling. The data were analyzed based on the fourty (40) questionnaires filled and returned by the respondents using simple percentage table. The result of this research shows that there is no positive response by financial institution in granting loan to Micro and Small Enterprises and usually demand for excessive collateral before granting loan request, secondly, if at all loan is to be granted, there is high interest rate charged on such loan, similarly, the repayment of the loans granted at high interest is within a short period of time which results to un-fulfillment of the purpose of the loan. Therefore, in order for the MSE’s to enhance the chance of credit assessment, the study recommends that, proper books of account should be maintained because it is usually one of criteria in credit assessment, secondly, owners/manager of MSE’s should be equipped with necessary skills regarding credit/cash management and investment decision and also, financial institution should consider making credit facilities available to MSE’s at lower interest rate in order to sustain economy growth.