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Developing countries have been faced with
different economic constraints that have
impeded their growth and development
potentials. In Nigeria, the reduction in formal
sector employment and the high
unemployment rate, which pose severe
economic and social challenges, have
become matters of urgent national concern.
This study uses secondary data collected
from 1991Q1–2020Q4 to examine the Impact
of SME credit access on employment generation in Nigeria. It utilizes the
Autoregressive Distributed Lag (ARDL)
estimation technique. The results show both
the short and long-term effects of SME credit
access on employment generation in Nigeria.
The outcome also showed that access to SME
credit has a positive and statistically
significant impact on creating employment.
Therefore, the study recommends that banks
should be obliged to offer much-needed
funds to SMEs with little or affordable collateral. The government should take
regulatory measures to keep commercial
banking loan rates competitive and not
unnecessarily exorbitant. Furthermore, the
government should implement effective
monitoring and evaluation mechanism to
ensure that development financial institutions
meet their mandates and objectives. In
addition, the government, chambers of
commerce and industry, and other non-
governmental organizations should hold regular seminars for potential and existing
small and medium-sized firm operators on
how to plan, organize, direct, and control
their operations to make them more
productive as job creators.
