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This paper investigates the effects of social capital on access to credit by household
nonfarm small enterprises in Nigeria. Specifically, the paper tries to ascertain how
social capital determines ability of household small businesses to borrow from for-
mal and informal sources and the amount of credit accessed. The study uses data
from the General Household Survey to estimate probit and Heckman selection
model that form the basic models of the study. Specifically, the results show that
belonging to informal groups increases the probability of accessing credit by 1.88%,
and also has significant positive impact on the probability of using the loan to
operate the enterprise. Also, membership of cooperatives significantly increases the
probability of accessing enterprise loan. The results show that belonging to cooper-
atives and informal groups are the only social capital variables that have statistically
significant impact on the amount borrowed.
